:max_bytes(150000):strip_icc()/GettyImages-2042726-03205c7fae7f413b97c70f71e6a3d76a.jpg "IEA Sees Lower 2025 Oil Demand Following Slow Q2")
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Key Takeaways
- Oil demand won’t grow as much as previously anticipated next year, the International Energy Agency said Thursday.
- The IEA said demand growth in the second quarter was the slowest since the fourth quarter of 2022, driven by shrinking consumption in China.
- The global oil market will likely be in a state of surplus next year, as demand slows thanks to the growing efforts to shift away from fossil fuels through methods like electric cars.
Demand for oil in 2025 is projected to grow less than previously expected after the global oil market had its slowest quarter since the end of 2022, the International Energy Agency (IEA) said in a new monthly report Thursday.
Oil demand grew by 710,000 barrels per day year-over-year in the second quarter, which the IEA said is the slowest growth since the fourth quarter of 2022. Consumption in China, one of the most important markets for oil across the globe, contracted in April and May, putting its current consumption levels slightly below the same time last year, the IEA said.
Oil Market Faces Headwinds in 2025
The agency said it expects demand growth for the 2024 to be around 970,000 barrels per day, with a projection of 980,000 barrels per day for 2025, lowered from a previous projection of 1 million barrels per day.
The global oil market faces several headwinds heading into the second half of this year and into 2025, including “subpar economic growth, greater efficiencies and vehicle electrification,” the IEA said.
As demand has slowed, production has continued to increase, with oil production growing 910,000 barrels per day from the first quarter, with the U.S. leading the way. The IEA is projecting supply growth of 770,000 barrels per day in the third quarter, with most of the growth coming from non-OPEC+ producers.
Supply will likely continue to outpace demand next year, as the IEA said it expects 2025 production growth averages of 1.8 million barrels per day, thanks to rising production from the U.S., Canada, Brazil, and Guyana.
Oil futures were little changed as of 8:15 a.m. ET Thursday, with global Brent crude at $85.15 and West Texas Intermediate (WTI) at $82.07.