OPEC's Optimism Clashes With IEA's Conservative 2025 Oil Growth Projections

The International Energy Agency has revised its global oil demand outlook slightly for 2025, projecting growth of 1.05 million barrels per day, down from the previously estimated 1.1 million barrels daily.

The new forecast anticipates global demand will average 104 million barrels daily, reflecting a combination of improving economic conditions and lower fuel prices.

In the fourth quarter of 2024, oil demand rebounded strongly, increasing by 1.5 million barrels daily—the highest growth since late 2023.

Also Read: Microsoft Launches CoreAI Division: Ex-Meta Exec To Supercharge Copilot And AI Innovations

The IEA attributed this surge to reduced fuel prices, colder weather in northern regions, and heightened petrochemical activity in the U.S. However, while 2025 demand growth will likely surpass 2024, it will fall short of the over 2 million barrels per day increase seen in 2023.

OPEC projects a higher demand growth of 1.45 million barrels daily.

Disappointing data from major Asian markets, including China, India, and African countries, prompted OPEC to revise its oil demand growth forecasts for 2024 several times.

Still, OPEC’s estimates looked more optimistic than those of Wall Street banks and Saudi Aramco.

China saw a significant uptick in oil demand in November, driven by rising gasoil consumption and falling diesel prices, which hit their lowest in nearly three years.

The IEA highlighted that signs of stabilization in China’s property market could support further recovery in oil demand. Projections suggest China will add 220,000 barrels per day to its oil consumption in 2025, compared to a 180,000-barrel daily increase in 2024, the Wall Street Journal reports.

Recent U.S. sanctions targeting Russia’s energy sector and shipping networks and measures aimed at Iran’s shadow fleet could disrupt global oil supplies. These actions may compel major buyers like China and India to seek alternative sources.

Meanwhile, Brent crude prices hover around $80 per barrel, and U.S. West Texas Intermediate trades near $77 per barrel, reflecting market concerns over tightened supply, the WSJ reports.

Despite geopolitical pressures, global oil supply rose modestly in December 2024, supported by increased production in Nigeria and Libya. For 2025, the IEA forecasts supply growth of 1.8 million barrels daily, led by non-OPEC+ countries such as the U.S., Brazil, and Canada. However, the agency cautioned that sanctions or weather-related disruptions could rapidly draw down existing oil stocks.

Notable oil stocks include Exxon Mobil Corp XOM, Chevron Corp CVX, Shell Plc SHEL, TotalEnergies SE TTE, Petroleo Brasileiro PBR and BP Plc BP.