IEA revises annual growth forecast upward as oil demand strengthens, with notable increases across Asia and the Middle East
The International Energy Agency’s (IEA) January 2025 Oil Market Report reveals a revised annual growth forecast for oil demand, reflecting a more robust recovery than initially anticipated.
Global demand for oil is now projected to increase by 2.1M barrels per day (b/d) in 2025, representing a 2.2% year-on-year increase and a rise of 200,000 b/d from previous estimates.
Asian economies continue to lead the resurgence in demand, with China and India contributing significantly to the upward revision. The report highlights a 4.5% growth in oil demand in China, equivalent to an increase of 900,000 b/d, spurred by a robust recovery in industrial activity. India’s oil demand is also expected to rise by 3.2%, driven by expanding infrastructure and rising vehicle ownership, adding an additional 650,000 b/d.
Meanwhile, the Middle East has emerged as another focal point of growth, with oil demand rising by 3.8%, equivalent to 500,000 b/d, bolstered by expanding refining capacity and heightened domestic consumption.
“We are witnessing a marked increase in oil demand from the Middle East, driven by industrial activities and sustained regional economic growth,” the report noted.
Conversely, demand in OECD countries has shown more modest growth of 0.5%, with Europe grappling with economic headwinds that have tempered consumption in key sectors.
However, the United States remains a notable exception, with transport fuel demand growing by 1.1% (200,000 b/d), offsetting declines in other areas.
The IEA attributes the overall upward revision to stronger global economic activity and stabilising oil prices, which have encouraged consumption across multiple regions.
Despite this optimistic outlook, the report warns of potential challenges stemming from geopolitical tensions and the ongoing energy transition.
The findings underscore the complexity of forecasting in a rapidly evolving energy landscape, with shifting regional dynamics playing an increasingly pivotal role in shaping global oil demand.
Source: Rivera, Published: 20 Jan 2025 by Craig Jallal
