IEA raises global oil demand growth forecast

The Paris-based energy agency has raised its forecast by 50,000 b/d and now expects global oil demand to grow by 1.10 million b/d this year.

PHOTO: Oil barrels. Getty Images

China will remain the largest source of oil demand growth in 2025, “even as the pace of its expansion is a fraction of recent trends and driven almost entirely by its petrochemical sector,” the International Energy Agency (IEA) said.

India and other “emerging economies” will also contribute to the growth in world oil demand, while consumption in the OECD group of developed nations is expected to decline this year, the IEA said.

“India and Other Asia provide an increasing share of [oil demand] growth [in 2025], contributing a combined 500 kb/d [500,000 b/d],” the IEA said in its monthly Oil Market Report (OMR).

Supply forecast

Global oil supply plunged by 950,000 b/d in January to 102.7 million b/d, primarily due to outages caused by bad weather conditions in the US. This was compounded by output declines in OPEC+ nations including Libya and Nigeria, the IEA explained.

Total oil supply is on track to increase by around 1.6 million b/d in 2025 to 104.5 million b/d, “with non-OPEC+ producers accounting for the bulk of the increase if OPEC+ voluntary cuts remain in place,” the IEA said.

The latest round of US sanctions against Russia and Iran’s energy sector have yet to materially impact global oil supply, the IEA said. Meanwhile, non-OPEC oil supplies are set to expand by 1.4 million b/d in 2025, well above the projected demand growth, it added.

“It is still too early to tell how trade flows will respond to new US tariffs [on China, Mexico and Canada] or the prospect thereof, and what the impact of the escalation of sanctions on Iran and Russia may be in the longer run,” the energy agency remarked.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online