IEA maintains global oil demand growth outlook
The Paris-based energy agency expects global oil demand to grow by 970,000 b/d this year, largely unchanged from its previous month’s projection.
PHOTO: Oil barrels. Getty Images
The International Energy Agency (IEA) sees oil demand growth to be less than 1 million b/d in both 2024 and 2025. This decline can be largely attributed to “lacklustre macroeconomic drivers."
In comparison to the growth of 2.3 million b/d seen last year, global oil demand this year is growing at a relatively slower rate, the IEA said. Oil demand growth in 2025 is expected to be around 980,000 b/d, it added.
Demand growth is currently facing headwinds from reducing oil consumption in China, “driven by a slump in industrial inputs, including for the petrochemical sector, the IEA said. Chinese crude oil imports in July were the lowest “since the stringent lockdowns of September 2022,” the energy agency added.
The slowdown in oil demand growth may pull crude prices below the $80/bbl benchmark, but the global oil market could also enter a state of deficit if the OPEC+ keeps output at current levels and decides to extend production cuts, the IEA said.
The oil producer group OPEC and the IEA have very different growth projections for this year and 2025. According to OPEC's latest report, global oil demand is projected to grow by a steeper 2.1 million b/d this year and 1.80 million b/d in 2025.
Supply forecast
Global oil supply gained 230,000 b/d in July to 103.4 million b/d, the IEA estimated. For the entire year, the agency expects global oil output to grow by 730,000 b/d, mainly driven by leading non-OPEC producers including the US, Brazil, Canada, and Guyana.
“Global inventories could build by an average of 860 kb/d [860,000 b/d] next year as non-OPEC+ supply increases by around 1.5 mb/d [1.5 million b/d] in 2024 and again in 2025, more than covering expected demand growth,” the IEA said.
However, the persistent geopolitical conflict escalating in the Middle East has continued to fuel supply disruption concerns in the global oil market and support Brent crude’s price gains, the energy agency estimated in its monthly Oil Market Report (OMR).
OPEC+ supply is projected to fall by 760,000 b/d, provided existing supply cuts are maintained in this year's third and fourth quarters.
In 2025, global oil supply is forecast to gain 1.90 million b/d, about 100,000 b/d higher than the previous month’s projection.
By Aparupa Mazumder
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