The IEA revises its 2024 forecasts with a slight decrease
According to the IEA, global oil demand is expected to grow by 1.1 million barrels per day (mb/d) in 2024, 140,000 barrels per day less than forecast in its previous monthly report.
The Agency estimates that this year, overall demand should exceed 103 mb/d.
2025 forecast “relatively unchanged”
The forecasts for 2025 remain “relatively unchanged”, underlines the IEA. Which expects demand to grow to 1.2 mb/d, which would put it slightly above that of 2024. According to its estimates, overall demand would reach more than 104 mb/d in 2025.
Slowdown in demand for diesel and Europe
The slowdown observed this first quarter particularly concerns diesel, a situation due to the gradual decline in the diesel vehicle fleet. It is also linked to a rather mild winter and a general gain in energy efficiency, indicates the monthly report.
Ultimately, growth in demand remains driven by emerging countries and primarily China, but the IEA nevertheless observes a deceleration compared to 2023 and the post-Covid recovery.
Supply up thanks to non-OPEC+ countries
For its part, supply should increase by 580,000 barrels per day, thanks in particular to the production of producing countries that are not members of OPEC+, a cartel whose production growth is expected at +1.4 mb/d.
Among them, the IEA is particularly counting on an increase in supply from the United States, Guyana, Canada and Brazil. The Agency notes, however, that the growth of American supply has slowed.
OPEC+ supply expected to fall
At the same time, supply from OPEC+ countries is expected to fall by 840,000 barrels per day this year, provided however that the cartel and its allies maintain their strategy of restricting their production. A meeting is planned for June 1.
An Iraqi official recently confirmed Iraq’s support for extending current OPEC+ quotas, despite the oil minister’s initial statements about refusing further cuts.
Iraq resists
Following statements by Iraqi Oil Minister Hayan Abdul Ghani, who appeared to reject any further production cuts at the next OPEC+ meeting next June, this official clarified the country’s position.
Speaking on condition of anonymity, he said Iraq was not opposed to extending current quotas, but that the country was showing some resistance to the idea of further cuts that could affect its economy and plans to increase production in partnership with international oil companies.
Iraqi officials have thus expressed their reluctance to further reduce production, given the country’s dependence on revenues from crude exports to finance its budget.
Additionally, many of Iraq’s oil fields are operated under complex technical service contracts by international companies, such as ExxonMobil and BP, and further cuts could require Baghdad to compensate these companies for unproduced barrels.
Iraq has struggled to meet its production target of 4 million bpd, including a voluntary reduction of 223,000 bpd since December 2023.
In April, the country pumped 4.24 million bpd, including an estimated 200,000 bpd from the semi-autonomous Kurdistan region, over which the Iraqi federal government says it has no control.
Nonetheless, Iraq has committed to a series of “compensatory cuts” for the coming months, affirming its commitment to the OPEC+ agreement.
Sources: IEA, AFP
