IEA cuts oil demand growth forecast to 900k bpd in ’24

The International Energy Agency (IEA) revised its global oil demand growth projections following a notable deceleration in China’s oil consumption. The IEA forecasts an increase of 900,000 barrels per day (b/d) in 2024, or 0.9 per cent, and 950,000 b/d, or 0.9 per cent, in 2025. This marks a significant decline from the 2.1 million b/d rise, or 2.1 per cent, recorded in 2023.

Data from the first half of 2024 show a 0.8 per cent year-on-year (YoY) growth in global oil demand. In China, however, oil demand dropped by 1.7 per cent, or 280,000 b/d, in July, contributing to a steep decline in Brent crude oil futures, which fell from over $82 per barrel in early August to below $70 per barrel by September 11.

China’s diminished impact on global oil demand results from shifting economic conditions and advances in technology. The surge in electric vehicle sales and the expansion of high-speed rail are curbing oil consumption for road transport and internal flights. Additionally, a slowdown in construction investment has led to reduced demand for gasoil and naphtha.

Emerging economies, particularly in Asia, are expected to drive future oil demand growth, with India projected to add 200,000 b/d in 2024. Despite this, India’s oil consumption remains much lower than China’s, and it is unlikely to replace China’s previous role in global demand growth fully.

If the current trend continues, global oil demand could plateau by the decade’s end.

Attribution: IEA

Subediting: M. S. Salama