IEA raises global oil demand growth forecast marginally

The Paris-based energy agency expects global oil demand to grow by 1.1 million b/d in 2025, with total consumption expected to average about 103.9 million b/d, slightly up from its previous month’s projection.

PHOTO: Oil barrels along with the world map. Getty Images

The International Energy Agency (IEA) expects emerging Asian markets to drive oil demand growth next year, while growth in China is expected to decline further.

Global oil demand this year is growing at a much slower rate at 800,000 b/d compared to the 2 million b/d growth achieved last year, the IEA said. “The bigger question for 2025 remains global oil demand,” the energy agency remarked.

“The abrupt halt to Chinese oil demand growth this year,” along with a sharp decline in oil demand in other developing economies such as Nigeria, Pakistan, Indonesia, South Africa, and Argentina, “has tilted consensus towards a softer outlook,” the IEA said.

Supply forecast

Global oil supply rose by 130,000 b/d to 103.4 million b/d in November, primarily due to the resumption of crude output in Libyan and Kazakhstan, the IEA said in its monthly Oil Market Report (OMR).

Although OPEC+ decided to delay the planned output increase by three more months through March 2025, non-OPEC producers including the US, Canada, Guyana, Brazil, and Argentina, will boost supply by about 1.5 million b/d in both 2024 and 2025, the IEA estimated.

Total oil supply is on track to increase by 630,000 b/d in 2024 and by 1.9 million b/d in 2025, to 104.8 million b/d, “even in the absence of unwinding of OPEC+ cuts,” the IEA said.

“Persistent overproduction from some OPEC+ members, robust supply growth from non-OPEC+ countries, and relatively modest global oil demand growth leaves the market looking comfortably supplied in 2025,” the IEA said.

Finally, even with the Saudi Arabia-led coalition's cuts in place and supply risks omnipresent, the IEA sees global supply exceed demand by about 950,000 b/d next year. “If OPEC+ does begin unwinding the voluntary cuts from the end of March 2025, this overhang would rise to 1.4 mb/d [million b/d],” it added.

By Aparupa Mazumder

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