IEA hikes global oil demand growth forecast

Paris-based International Energy Agency (IEA) now expects global oil demand to grow by 830,000 b/d in 2025 - about 40,000 b/d higher than its previous estimate.

IMAGE: Oil barrels. Getty Images

The IEA expects global oil demand to rise by about 860,000 b/d next year – about 90,000 b/d higher than its last month’s projection.

Global oil demand growth in 2026 will be driven primarily by the petrochemical sector and feedstocks, “with their share rising to more than 60% [in 2026] from 40% in 2025,” it said.

Even so, the agency expects global oil demand to remain well below oil production levels. This imbalance in both fundamentals has clearly been affecting oil prices, “with ICE Brent down by nearly $20/bbl since January,” the IEA said.

Supply forecast

In November, global oil supply decreased by 610,000 b/d from October levels, to a little short of 108 million b/d, and by 1.5 million b/d from September’s all-time high, the IEA noted in its monthly Oil Market Report (OMR).

OPEC+ producers accounted for 80% of the decline over the two-month period, the IEA noted, “reflecting significant unplanned outages in Kuwait and Kazakhstan, while output from sanctions-hit Russia and Venezuela contracted sharply.”

Russia’s total oil exports fell by roughly 400,000 b/d in November to 6.9 million b/d, while Iran’s oil loadings continued to grow by about 1.9 million b/d, the agency said. However, “with Chinese independent refiners pausing buying amid exhausted import quotas, Iranian oil on water surged by 40 mb [40 million bbls] since August,” it added.

Non-OPEC+ countries, including the US and Brazil’s oil consumptions, have been affected by biofuels uptake. The energy agency now projects global oil supply to grow by 3.3 million b/d to average 106.2 million b/d in 2025 and rise by about 2.4 million b/d to average 108.6 million b/d in 2026.

By Aparupa Mazumder

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