IEA Slightly Raises 2025 Global Oil Demand Forecast with Shifting Growth Drivers
The International Energy Agency updates its 2025 oil demand outlook, highlighting China's reduced growth role and emerging Asian economies' rising influence.
HIGHLIGHTS
- The International Energy Agency (IEA) has modestly increased its forecast for global oil demand growth in 2025, citing continued but slower growth from China.
- The Paris-based organization now anticipates global oil consumption to rise by 1.1 million barrels per day (b/d), up from last month’s estimate of 1.05 million b/d.
- By comparison, oil demand grew by 870,000 b/d in 2024, a figure recently revised downward.
The IEA’s latest report reveals that while China remains a key contributor to oil demand growth, its expansion pace has slowed significantly. The agency notes that China’s oil demand increase is now largely fueled by its petrochemical industry rather than broader economic factors.
Emerging Asian Markets Gain Prominence in Oil Demand Growth
China’s share of the global oil demand increase has dropped to 19%, a sharp decline from about 60% during the previous decade. Meanwhile, India and other emerging Asian economies are capturing a larger portion of growth, signaling a shift in global energy consumption patterns.
The IEA also indicates that it remains too early to fully assess the effects of U.S. tariffs on Canadian energy imports or the impact of intensified sanctions on Iran and Russia.
Notably, the U.S. had imposed a 10% tariff on Canadian energy imports, which is lower than the 25% tariffs applied to other goods from Canada and Mexico; these tariffs are currently paused for a month.
As of Thursday, Brent crude oil futures are trading near $74 per barrel, while West Texas Intermediate (WTI) futures hover around $70 per barrel.
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