Global oil demand is expected to rise by 920,000 barrels per day (bpd) in 2024, the International Energy Agency (IEA) said Thursday, revising its previous growth forecast upwards. However, the IEA also warned that weak demand growth could lead to a supply surplus in 2025.
In its latest monthly oil market report, the IEA increased its 2024 demand growth estimate to 920,000 bpd, up from 862,000 bpd in October. For 2025, the agency slightly lowered its forecast to 990,000 bpd from 998,000 bpd, citing weaker-than-expected demand, particularly from China.
Despite the IEA’s updated figures, its projections remain significantly lower than those from OPEC. Although OPEC has reduced its demand growth forecast for the fourth consecutive month, it still expects global oil demand to grow by 1.82 million bpd in 2024 and 1.54 million bpd in 2025.
The IEA attributed the slowdown in demand growth to the end of the post-pandemic surge and ongoing global economic challenges, compounded by the rising adoption of clean energy technologies.
As the year nears its end, global oil demand is on track to reach an average of 102.8 million bpd in 2024. This represents a much slower growth rate compared to the 2 million bpd increase seen in 2023, and the 1.2 million bpd annual average growth from 2000 to 2019.
The slowdown in Chinese demand has been a major factor. The IEA expects China’s oil demand to grow by just 140,000 bpd this year, a sharp decline from the 1.4 million bpd increase seen in 2023. Chinese demand contracted for the sixth consecutive month in September, and in the third quarter, average demand was 270,000 bpd lower than the same period last year.
While demand growth is sluggish, global oil supply is increasing. The United States is leading non-OPEC+ supply growth, with production expected to rise by 1.5 million bpd in both 2024 and 2025, supported by higher output from Canada, Guyana, and Argentina.
The IEA’s projections suggest that even with OPEC+ production cuts in place, global supply could surpass demand by more than 1 million bpd in 2025.
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