The International Energy Agency (IEA) has again reviewed its oil demand forecast for 2024 downward, citing weaker deliveries from the Organization for Economic Cooperation and Development (OECD) countries for its latest action.
The IEA’s latest oil report shows a slower global oil demand growth of 1.6 million barrels per day (mbbl/d) in the first quarter (Q1) of 2024 due to what it termed “exceptionally weak” deliveries by the OECD countries.
In its April oil report the agency lowered the growth outlook for this year by 130,000 barrels per day (bpd) to 1.2mbbl/d while its 2025 forecast showed that the “pace of expansion will decelerate further, to 1.1 mbpd [million barrels per day] next year as the post-Covid 19 rebound has run its course.”
According to the IEA, China’s impact on the worldwide surge in oil consumption is expected to decline from 79 per cent in 2023 to 45 per cent in 2024 and 27 per cent the following year.
It noted that the timing of lockdown measures in China was notably different from the rest of the world, and global oil demand growth relied heavily on the country in 2023.
The IEA commented: “With the explosive phase of the pandemic rebound largely complete elsewhere, China contributed to more than three-quarters of the global increase in demand (1.7 mb/d [million barrels per day] out of 2.3 mb/d).”
Earlier in its January report the energy agency projected that India was expected to be the largest contributor to global oil demand growth between 2023 and 2030, just ahead of China.
Indian oil companies continue to invest heavily in refining to keep up with the rising demand for oil within the country. The Agency predicts that India’s demand for oil will increase to 6.6mbbl/d by 2030, up from 5.5mbbl/d in 2023.
The IEA forecast said non-OPEC+ countries, mainly the US, are expected to drive global oil supply growth until 2025.
In 2024, global oil production is predicted to increase by 770,000bpd to 102.9mbbl/d.
The agency further projected: “The additional volumes from the United States, Brazil, Guyana and Canada alone could come close to meeting world oil demand growth for this year and next. These four countries are set to once again produce at record highs, adding a combined 1.2 mbpd in 2024 and 1 mbpd in 2025.”
Throughout 2025, non- OPEC+ production will grow by 1.6mbbl/d, while OPEC+ supply could fall by 820,000bpd if the voluntary cuts remain in place.
On the other hand, the forecast shows that the global oil supply will increase by 900,000bpd in 2021. Additionally, OPEC+ supply is expected to fall by 820,000bpd, provided the cuts are maintained throughout the second half of this year.
The IEA further clarified: “In 2025, global oil supply is forecast to increase by 1.6 mbpd to a new record of 104.5 mbpd, as non-OPEC+ lead gains for a third straight year, rising by 1.4 mbpd.”
