IEA Updates 2025 Oil Demand Growth Forecast Amid China’s Economic Slowdown

Key Insights

• The International Energy Agency (IEA) has increased its forecast for global oil demand growth in 2024 while lowering the outlook for 2025, mainly due to China's economic deceleration.
• The IEA now expects oil demand to rise by approximately 920,000 barrels per day (b/d) in 2024, up from just under 900,000 b/d in its previous October forecast.
• For 2025, the agency predicts growth to be just under 1 million b/d, slightly less than the earlier estimate of around 1 million b/d.

The International Energy Agency (IEA) announced updated projections for oil demand growth, raising estimates for 2024 but revising them downward for 2025, attributing the changes primarily to a slowdown in China’s economy.

According to the Paris-based organization, "China’s significant economic slowdown remains the primary factor restraining demand growth, with an expected increase this year of only about 0.1 million barrels per day, compared to 1.4 million b/d in 2023."

The IEA forecasts global oil demand to grow by roughly 920,000 barrels per day in 2024, an upward revision from the previous October estimate of just under 900,000 barrels per day. For 2025, the agency projects demand growth to be slightly below 1 million barrels per day, down from an earlier forecast of approximately 1 million barrels per day.

Oil Demand Growth Moderates After Pandemic Surge

The IEA’s updated forecasts reflect a moderation in oil demand growth compared to the post-pandemic surge seen in 2022 and 2023, when increases reached around 2 million barrels per day. This slowdown is attributed to several factors, including the normalization of demand following the pandemic spike, underlying global economic challenges, and a shift by consumers towards cleaner energy alternatives replacing fossil fuels.

These revisions align with recent downward adjustments made by the Organization of the Petroleum Exporting Countries (OPEC), which cited updated consumption data from the first three quarters of the year.

As of Thursday, Brent crude prices traded slightly higher at $72.54 per barrel, while West Texas Intermediate crude edged up to $68.69 per barrel.

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