IEA Projects Global Oil Demand Growth to Reach 1.1 Million bpd in 2025

The International Energy Agency (IEA) has projected global oil demand growth to average 1.1 million barrels per day (mbd) in 2025, up from 870 thousand barrels per day (kb/d) in 2024.

The 1.1mbpd projected growth in 2025 indicated that the IEA marginally revised its forecast for global oil demand growth this year, following a slight downgrade of 2024 growth to 870 kb/d.

The IEA Oil Market Report (OMR) also revealed that world oil supply plunged 950 kb/d to 102.7 mbd in January, as seasonally colder weather hit North American supply, compounding output declines in Nigeria and Libya.

According to the just-released OMR, one of the world’s most authoritative and timely sources of data, China will marginally remain the largest source of growth, even as the pace of its expansion is a fraction of recent trends and driven almost entirely by its petrochemical sector.

At the same time, India and other emerging Asian economies are taking up increasing shares.

According to the report, the Organisation for Economic Cooperation and Development (OECD) demand is forecast to return to structural decline following a modest increase last year.

Although the report revealed that world oil supply plunged 950 kb/d to 102.7 mbd in January, supply was nevertheless 1.9 mbd higher than a year ago, with gains led by the Americas.

The report further revealed that global oil supply is on track to increase by 1.6 mbd to 104.5 mbd in 2025, with non-OPEC+ producers accounting for the bulk of the increase if OPEC+ voluntary cuts remain in place.

Global crude runs fell by 1 mbpd to 82.9 mb/d in January as a cold snap and planned maintenance work reduced US runs, the report added.

Throughputs are forecast to average 83.3 mb/d this year, with gains of 580 kb/d year-on-year (Y-o-Y) led by non-OECD regions.

The report said: “Sour crude refining margins collapsed in Asia in mid-January, as new US sanctions on Russian boosted Dubai crude prices. Atlantic Basin margins benefited from higher middle distillate cracks.

“Global observed oil stocks fell 17.1 mb m-o-m to 7 647 mb in December, as crude oil stocks plunged by 63.5 mb and products stocks rose by 46.4 mb.

“OECD industry inventories continued to decline, by 26.1 mb to 2 737.2 mb, 91.1 mb below their five-year average.

“Preliminary data show total global inventories falling a further 49.3 mb in January, led by a large crude stock draw in China.

“North Sea Dated rallied $8/bbl in early January, briefly trading at a five-month high of $83/bbl, fuelled by new US sanctions on Russia and a Northern Hemisphere cold snap.

“However, most of these gains then reversed after macro sentiment soured, with the prospect of higher US tariffs raising fears of an emerging trade war. Dated ended the month at $77/bbl, up $2.50/bbl, and was trading at around this level in early February.”

Ndubuisi Francis

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