IEA Lowers 2024 Oil Demand Growth Forecast

The International Energy Agency (IEA) has revised its forecast for oil demand growth in 2024, lowering expectations due to weak demand in developed OECD countries, particularly in Europe.

Earlier on Wednesday, the Paris-based organization adjusted its growth outlook for this year by 140,000 barrels per day, bringing it to 1.1 million bpd, while slightly increasing the 2025 oil growth forecast to 1.2 million bpd.

The IEA attributed the reduced forecast for 2024 oil demand to sluggish economic growth, especially in Europe, where a declining percentage of diesel vehicles is impacting consumption levels. The IEA noted that “weak diesel deliveries in the United States at the start of the year” contributed to a contraction in OECD oil demand during the first quarter.

This contrasting outlook puts the IEA at odds with the Organization of the Petroleum Exporting Countries (OPEC), which recently reaffirmed its projection that global oil demand will increase by 2.25 million barrels per day in 2024.

The IEA emphasized that global oil demand will likely be a significant topic during the upcoming OPEC+ ministers’ meeting in Vienna on June 1, where they will discuss production policies for the remainder of the year. Despite recent demand softness, the IEA’s current balances indicate a call on OPEC+ of approximately 42 million bpd in the latter half of this year, which is about 700,000 bpd above the group’s output in April.

Additionally, the IEA raised its forecast for global oil supply by 580,000 bpd for this year, projecting a record of 102.7 million bpd. This increase is driven by a rise in non-OPEC+ output by 1.4 million bpd, while OPEC+ production is expected to decline by 840,000 bpd, assuming that voluntary cuts remain in place.