IEA largely maintains global oil demand growth outlook

The Paris-based energy agency expects global oil demand to grow by just 900,000 b/d, with total consumption expected to average about 103 million b/d in 2024, slightly changed from its previous month’s projection.

PHOTO: Oil pump jacks. Getty Images

The International Energy Agency (IEA) sees oil demand growth to be about 1 million b/d in 2025. This slowdown in demand growth can be attributed to “particularly weak” Chinese demand, with consumption dropping by 500,000 b/d year-on-year in August, it said.

In comparison to the growth of 2 million b/d seen last year, global oil demand this year is accelerating at a much slower rate, the IEA said. “China underpins the deceleration in [demand] growth, accounting for around 20% of global gains both this year and next year, compared to almost 70% in 2023,” the energy agency said.

This apparent decline in oil demand growth, coupled with the prospect of a well-supplied oil market in 2024 and 2025 dragged Brent crude’s price to “multi-year lows in September,” the IEA said in its monthly Oil Market Report (OMR).

However, oil prices can shoot up again due to escalations in the Middle Eastern conflict, the IEA warned. The oil market is now focused on Israel’s next move, “and questions over whether key Iranian energy infrastructure could be targeted,” the IEA said.

Contrastingly, the Saudi Arabia-led oil producer group OPEC and the IEA have very different growth projections for this year and 2025. According to OPEC's latest forecast, global oil demand is projected to grow by a much higher rate of 1.9 million b/d this year and 1.6 million b/d in 2025.

Supply forecast

Global oil supply plunged by 640,000 b/d in September to 102.8 million b/d, primarily caused by political disputes in Libya and field maintenance work in Kazakhstan and Norway the IEA estimated.

“Libyan crude shipments have resumed, following the hard-won agreement that resolved the political dispute that had disrupted oil exports,” the IEA said. The global oil market “looks adequately supplied” for the entire year, with non-OPEC production on the rise, it added.

Non-OPEC supply is projected to increase by 1.5 million b/d this year and next, the Paris-based agency remarked. Countries including the US, Brazil, Guyana, and Canada are set to account for most of the increase, boosting oil output by over 1 million b/d in the current and next year, the IEA estimated.

By Aparupa Mazumder

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