The International Energy Agency (IEA) has forecasted a surplus in global oil supply for 2025, primarily due to weak demand from China. Key points include:
China’s Demand Growth: The IEA anticipates that China’s oil demand growth will remain subdued despite recent stimulus measures from the government. As the Chinese economy slows to around 4% growth, energy needs are expected to decline.
Electric Vehicle Impact: The shift towards electric vehicles, which are becoming more cost-competitive, will further reduce traditional oil demand in China.
Limited Impact of Stimulus: IEA Executive Director Fatih Birol noted that the recent fiscal measures from Beijing have not significantly boosted oil demand, which would have been flat this year without the petrochemical sector.
Global Oil Prices: Oil prices are currently around $70 per barrel, having dropped over 7% recently, influenced by weak demand expectations for both this year and next.
Supply Factors: Increased production from non-OPEC countries, including the U.S., Canada, Brazil, and Guyana, is outpacing global demand growth, contributing to the supply surplus.
OPEC+ Production Cuts: When asked about OPEC+’s potential production cuts in 2025, Birol stated that it would depend on OPEC’s decisions, but he expects a surplus in the absence of significant geopolitical changes.
This outlook suggests significant challenges for the oil market, particularly in light of shifting demand patterns in China and increasing supply from non-OPEC producers.