According to the International Energy Agency (IEA), global oil supply will exceed demand in 2025, even if production cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+) remain in place, due to increased production from the United States and other non-member producers, which will offset slowing demand. This is what the newspaper TheEdge Malaysia reports in an article published on November 14.
This forecast surplus of more than one million barrels per day, or more than 1% of world production, constitutes an obstacle for Opec+ in its plan to gradually increase production.
Global oil demand has been weaker than expected this year, largely due to China. After being a major driver of oil consumption for several years, China’s economic slowdown and increased adoption of electric vehicles are now moderating prospects for demand growth in the world’s second-largest oil consumer.
“China’s sharp deceleration was the main drag on demand,” the IEA said in its monthly oil market report.
“The rapid deployment of clean energy technologies is also increasingly replacing oil in transportation and power generation, putting downward pressure on already weak demand drivers,” the agency added.
The IEA maintained its oil demand growth forecast for 2025 at 990,000 barrels per day.
On the other hand, it forecasts that non-OPEC+ countries will increase their production by 1.5 million barrels per day, mainly due to the United States, Canada, Guyana and Argentina, i.e. more than growth in demand.
Demand in 2024 on the rise
For 2024, the IEA revised its oil demand growth forecast slightly upwards, adding 60,000 barrels per day to its previous estimates, to reach 920,000 barrels per day, due to higher demand for diesel. strong than expected.
“The growth rate of less than a million barrels per day for these two years reflects less favorable global economic conditions, with the release of pent-up demand after the pandemic now ended,” the IEA said.
Global demand growth forecasts for 2024 vary widely, in part due to uncertainties over demand from China and the global transition to cleaner energy. The IEA is at the lower end of industry estimates, while Opec, at the higher end, has revised down its growth forecasts for this year and the year next year, but anticipates much faster growth in demand, of 1.82 million barrels per day and 1.54 million barrels per day, respectively.
According to the IEA, growth in Chinese demand is expected to be limited to only 140,000 barrels per day in 2023, ten times less than the 1.4 million barrels per day recorded in 2022.
Source : TheEdge Malaysia
