IEA raises global oil demand growth forecast to 1.3 million b/d for 2024

The Paris-based energy agency expects global oil demand growth to decline from 2.3 million b/d in 2023 to 1.3 million b/d this year, 110,000 b/d higher than last month’s projections.

PHOTO: An offshore oil rig captured at dusk. Getty Images

The International Energy Agency (IEA) also expects global oil demand growth to return to its “historical trend” as trade flow disruptions due to the ongoing conflict in the Red Sea boost bunker fuel demand.

“Longer shipping routes and faster vessel speeds saw Singapore bunkering reach all-time highs,” the IEA said. Moreover, a surge in the US petrochemical sector resulted in the upward revision of IEA’s global oil demand expectations, the energy agency said in its monthly Oil Market Report (OMR).

However, global oil demand growth this year is expected to be lower than 2.3 million b/d growth in 2023. Oil demand growth in China – one of the world's top oil consumers – is set to slow down from 1.7 million b/d in 2023 to 620,000 b/d this year, according to the IEA.

“Growth will continue to be heavily skewed towards non-OECD countries, even as China’s dominance gradually fades,” the IEA noted.

Supply forecast

The IEA expects the global oil supply to grow by 800,000 b/d to 102.9 million b/d in 2024, with non-OPEC countries including the US, Guyana, Brazil, and Canada leading the production. Meanwhile, OPEC’s third-largest producer, Iran, is expected to increase production by 280,000 b/d this year, the IEA said.

Despite these factors, the energy agency lowered its supply growth projections for this year by 900,000 b/d from January’s analysis due to the extension of OPEC+ voluntary cuts into the second quarter of 2024.

“We are now holding OPEC+ voluntary cuts in place through 2024… on that basis, our balance for the year shifts from a surplus to a slight deficit,” the IEA said.

The agency anticipates global refinery crude throughputs to average 83.5 million b/d in 2024, an increase of 1.2 million b/d from the previous month’s projection.

By Aparupa Mazumder 

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