Skip to content Skip to Search
Skip navigation

Opec and IEA poles apart on oil supply predictions

Opec has kept its oil demand growth forecast at 2.2 million bpd Reuters/Leonhard Foeger
Opec has kept its oil demand growth forecast at 2.2 million bpd
  • IEA forecasts demand growth of 1m bpd
  • Opec sticks with 2.2m bpd increase
  • Both agree China will hold sway

Opec and the Paris-based International Energy Agency (IEA) have this week both issued reports with vastly differing predictions for the outlook for global crude production in the coming years.

However, the opposing organisations agree on one thing: that China will be the determining factor in production and prices this year.

In its latest annual medium-term market report, the IEA forecast on Wednesday that total supply capacity will rise to nearly 114 million barrels a day (bpd) by the end of the decade, “a staggering 8 million bpd above projected demand”.

These levels have never been seen before other than during the Covid-19 lockdowns in 2020, the IEA said.

“As the pandemic rebound loses steam, clean energy transitions advance, and the structure of China’s economy shifts, growth in global oil demand is slowing down and set to reach its peak by 2030,” said Fatih Birol, the IEA’s executive director. 

The IEA expects oil demand to rise by around 1 million bpd this year and to level off near 106 million bpd towards 2030. “The companies may want to give a fresh look at their business strategies and align with market realities,” said Birol.

This forecast differs greatly from Opec’s outlook. In its monthly report published on Tuesday, the oil producers’ club kept its oil demand growth forecast at 2.2 million bpd.

Brent traded nearly 1 percent up at $82.58 a barrel on Wednesday afternoon, while West Texas Intermediate (WTI) rose to $78.64. 

Crude prices recovered around 7 percent in one week after traders overreacted to Opec+’s decision to bring the supply of 2.2 million bpd back to the market over the 12 months beginning in October.

The organisation will still keep around 3.6 million bpd off the market until the end of 2025.

IEA expects non-Opec+ producers, such as the US, Canada, Guyana, Brazil and Argentina, to account for 76 percent of the capacity build net increase. 

Both organisations expect fast-growing Asian economies to drive the demand. China will continue to dominate growth in petrochemicals.

“The ongoing air travel recovery, healthy driving levels, and improvements in manufacturing sector activities are projected to support jet/kerosene, gasoline, and distillate demand in the region,” Opec said.

Recent reports have said that China's oil imports from Saudi Arabia are expected to fall for a third month in July to around 36 million barrels.

Latest articles

GCC UK tax. The Labour government under new prime minister Keir Starmer may merge capital gains tax with income tax Video length: 04:06

GCC investors in UK warned of new tax liabilities

The newly elected Labour government is expected to introduce a range of tax changes that will impact non-doms – British expatriates living overseas – as well as the UK’s community of wealthy foreign investors.  Tax consultants suggest that GCC investors considering selling their UK assets should do it “sooner rather than later” to escape the […]

Iraqi Airways is seeking to expand its international reach. The airline has been working to modernise its fleet and improve its service standards,

Iraq given boost in plan to lift European flight ban

Iraq has moved a step closer to returning its flag carrier to European skies after receiving the support of the International Air Transport Association (IATA). Iraqi Airways was originally banned from Europe in 1991 due to safety concerns. Restrictions were briefly lifted in 2009 but enforced again in 2015 as the airline failed to meet […]

Part of the $3 billion deal is to redevelop Indonesia's Soekarno-Hatta International Airport

Eagle Hills gets claws into Indonesia

Eagle Hills, the Abu Dhabi developer, looks set to add Indonesia to its burgeoning worldwide portfolio. A tentative agreement was signed on Wednesday with the Indonesian government to develop $3 billion worth of tourism assets in the Southeast Asian archipelago. The deal has a validity of one year only, with the possibility of renewal, and […]

In a concession to the electorate, the legislation before parliament proposes a 25 percent increase in the payment to pensioners on the lowest rate of support

Turkey targets business with steep taxes to raise revenue

Multinational corporations operating in Turkey face a steep increase in their tax bills, thanks to one of the new revenue-raising measures outlined by the government in draft legislation aimed at narrowing the budget deficit. Under the new tax reforms, tabled before the parliament on July 16, multinationals with more than $817.6 million in annual consolidated […]