IEA Lowers 2024 Crude Demand Growth Forecast, Anticipates 2029 Peak

The International Energy Agency (IEA) has revised its oil demand growth forecast for 2024 downwards, creating a divergence from the projections made by OPEC.

On Wednesday, the IEA lowered its oil demand growth estimate for the current year by 100,000 barrels per day (bpd), bringing the total to 960,000 bpd. The revision is attributed to weak consumption patterns in developed nations.

In contrast, the Organization of the Petroleum Exporting Countries (OPEC) has maintained a more optimistic outlook, projecting an increase in global oil demand of 2.25 million bpd for 2024 and 1.85 million bpd for 2025 in a report released on Tuesday.

The IEA emphasized that its expectation of a modest growth rate of 1 million bpd in 2025 is primarily influenced by a sluggish economy and the rapid deployment of clean energy technologies.

Regarding supply, the IEA indicated that OPEC+, a coalition of major producers, has established a plan to gradually lift additional voluntary supply cuts of up to 2.2 million bpd from the fourth quarter of 2024 to the third quarter of 2025.

The agency forecasts that global oil supply will increase by an average of 690,000 bpd this year, driven mainly by a 1.4 million bpd rise from non-OPEC+ countries. For the following year, total gains could reach 1.8 million bpd, with non-OPEC+ contributing 1.5 million bpd and OPEC+ adding 320,000 bpd.

However, the IEA cautioned that given the weak demand outlook, future supply adjustments may be necessary rather than further increases.

Additionally, the IEA’s analysis predicts that global oil demand will peak by 2029, followed by a decline in 2030, as supply from the U.S. and other non-OPEC nations increases. This perspective stands in stark contrast to OPEC’s view, which anticipates demand growth persisting well beyond 2029, partly due to a slower transition to cleaner fuels.