IEA raises global oil demand growth forecast slightly
The Paris-based energy agency expects global oil demand to grow by 920,000 b/d, with total consumption expected to average about 102.8 million b/d in 2024, slightly up from its previous month’s projection.
PHOTO: Crude oil barrels. Getty Images
The International Energy Agency (IEA) sees oil demand growth to be “just shy of” 1 million b/d in 2025. This slowdown in demand growth can be attributed to “below-par underlying global economic conditions, as well as clean energy technology deployment,” it said.
Global oil demand this year is growing at a much slower rate compared to the 2 million b/d growth achieved last year, the IEA said. China’s demand has contracted for the sixth straight month in September, according to the IEA.
“China’s marked slowdown has been the main drag on demand, with its growth this year expected to average just a tenth of the 1.4 mb/d [1.4 million b/d] increase in 2023,” the energy agency said.
Concerns over the global economy’s health and oil demand will be the key drivers of the market next year. World oil consumption is expected to grow by about 990,000 b/d in 2025, largely unchanged from the agency’s previous report.
“The sub-1 mb/d [1 million b/d] growth pace for both years reflects below-par global economic conditions with the post-pandemic release of pent-up demand now complete,” the IEA said. “Rapid deployment of clean energy technologies is also increasingly displacing oil in transport and power generation, adding downward pressure to otherwise weak demand drivers,” it added.
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 1.8 million b/d this year and 1.5 million b/d in 2025.
Supply forecast
Global oil supply rose by 290,000 b/d to 102.9 million b/d in October, primarily due to the resumption of Libyan crude output, the IEA said in its monthly Oil Market Report (OMR).
Although OPEC+ decided to delay the planned output increase by another month, non-OPEC producers including the US, Canada, Guyana, and Argentina, will boost supply by about 1.5 million b/d in both 2024 and 2025, the IEA estimated.
“Plagued by a number of unscheduled outages and operational underperformance this year, Brazil is expected to be a major source of growth next year,” the IEA said. The Latin American country is expected to boost supply by 210,000 b/d to 3.7 million b/d in 2025, as more than 800,000 b/d of new capacity starts up, according to IEA’s estimates. “Total growth from the five American producers will more than cover expected demand growth in 2024 and 2025,” the Paris-headquartered agency said.
Finally, even with the OPEC+ cuts in place and supply risks omnipresent, the IEA sees global supply to exceed demand by more than 1 million b/d next year.
By Aparupa Mazumder
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