The International Energy Agency (IEA) has revised its 2024 oil demand growth forecast, citing lower-than-expected consumption in OECD countries and a decline in factory activity. The Paris-based energy watchdog has reduced its growth outlook for this year by 130,000 barrels per day (bpd) to 1.2 million bpd. The IEA highlighted that the release of pent-up demand by China, the top oil importer, following the easing of COVID-19 restrictions, had reached its peak.
According to the IEA’s monthly oil report, delivery data for many countries indicated softer demand, attributed to unusually warm late-winter weather that reduced OECD heating fuel use more than usual. Additionally, a prolonged factory slump in advanced economies continued to dampen demand for industrial fuels.
This revised outlook falls significantly short of OPEC’s forecast of 2.25 million bpd for this year, which was based on robust fuel usage during the summer months. However, it surpasses the U.S. government’s more conservative energy forecast of a modest 950,000 bpd growth.
Looking ahead to 2025, the IEA anticipates a slight decrease in demand growth to 1.1 million bpd, with global GDP growth expected to remain steady and an acceleration in the expansion of electric vehicles. The report also highlights that China, which emerged later than other countries from COVID-19 movement restrictions, is projected to contribute less to global demand growth.
The IEA emphasized that China’s role in the global increase in oil demand is set to diminish from 79% in 2023 to 45% in 2024 and further to 27% in the following year. Despite the forecasted global deceleration, the level of oil demand growth remains largely in line with the pre-COVID trend, even amid subdued expectations for global economic growth this year and increased deployment of clean energy technologies.
The IEA also mentioned that global supply is expected to increase by 770,000 bpd, reaching a total of 102.9 million barrels per day, with non-OPEC+ countries leading the way in this growth.