The International Energy Agency (IEA) has adjusted its 2025 global oil demand forecast downward, reflecting the impact of a sluggish Chinese economy on global consumption.
The IEA maintained its 2024 demand growth forecast at 970,000 barrels per day (bpd) but reduced its 2025 estimate to 950,000 bpd, a cut of 30,000 bpd from previous projections.
In its latest monthly oil report, the Paris-based energy watchdog noted that weak economic growth in China, following the post-COVID surge in 2023, is significantly dampening global oil demand.
China, the world’s largest oil importer and the second-largest oil consumer, has experienced a deceleration in demand, affecting global consumption patterns.
The IEA’s report highlights that while China’s economic rebound from the pandemic has faded, strong demand in Western economies, particularly the United States, is expected to continue.
The U.S. is anticipated to see its strongest summer driving season since the pandemic, supported by robust gasoline consumption.
Additionally, the IEA pointed out that supply cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have tightened the oil market, resulting in a supply deficit.
In contrast to the positive outlook for developed countries, oil demand growth outside the OECD in the second quarter of this year was the slowest since 2020.
The IEA indicated that China’s contribution to global demand growth is expected to decrease to about a third in 2024, down from over two-thirds in 2023.
This reduction is particularly noticeable in gas, oil, and naphtha, driven by decreased construction and manufacturing activities and a potential slowdown in the growth of China’s petrochemical sector.
OPEC also revised its 2024 oil demand forecast downward for the first time since July 2023, attributing the adjustment to similar concerns about China. Despite this revision, OPEC projects a rise in global oil demand of 2.11 million bpd this year, in contrast to the IEA’s forecast of 970,000 bpd.
