IEA and Opec agree on one thing: 2024 demand was down

• IEA’s forecast is half of Opec’s
• Demand lower than expected
• Opec revises expectations

The Organization of the Petroleum Exporting Countries (Opec) and the Paris-based International Energy Agency (IEA) traditionally diverge strongly in their forecasts for the oil markets. 

While this is still the case – the IEA’s 2024 forecast for oil demand growth is about half that of its oil producing rival – the duo’s latest monthly reports do at least agree on one thing: that demand this year has been less than they previously estimated. 

The IEA on Thursday said in its monthly report that while growth in China has slowed, emerging Asia will continue to lead gains in 2024 and 2025.

For 2024, the IEA predicts demand to slow to 840,000 barrels per day (bpd), down from a previous forecast of 920,000 bpd, while in 2025 it should grow to 1.1 million bpd.

The IEA also said the decision by Opec+ to delay the unwinding of additional voluntary supply cuts has reduced the potential supply overhang predicted to emerge next year, which is still likely to amount to 950,000 bpd. 

However, “if Opec+ does begin unwinding the voluntary cuts from the end of March 2025, this overhang would rise to 1.4 million bpd,” the IEA said.

Opec on Wednesday also cut its global oil demand growth forecast for the fifth consecutive month. In its monthly report, the oil producers’ club reduced its 2024 demand growth forecast to 1.61 million bpd from the 1.82 million bpd anticipated last month.

In July, Opec had expected world demand to rise by 2.25 million bpd. For 2025, it estimates the demand to grow by 1.45 million bpd, down from 1.54 million bpd.

“The bulk of this revision is made in 3Q 24, taking into account recently received bearish data for 3Q24,” Opec said. The organisation made downward revisions to China, India and other Asian countries, as well to the Middle East and Africa.

It expects Chinese oil demand to grow by 430,000 bpd this year and by 310,000 bpd in 2025.

“In China, monetary and fiscal stimulus measures are projected to support the country’s gradually slowing growth dynamic, though uncertainty has arisen amid emerging concerns about tariffs announced by the incoming US Administration,” Opec said.

• Opec+ delays oil output hike until April
• Opec+ likely to adopt a wait-and-see strategy for 2025
• IEA confident global oil supply can absorb disruption

China, the world’s second-largest oil consumer and world oil demand engine over the last 10 years, reported its fastest factory activity growth in five months.

However, experts estimate its oil demand could peak as early as in 2025, mainly due to the renewable boom set to account for 63 percent of the energy mix by 2060.

Brent was flat on Thursday at $73.50 a barrel at 14h58 GST, while WTI traded at $70.29.