The International Energy Agency (IEA) has announced its intention to expedite the release of its initial 2025 oil demand forecast by two or three months
In a strategic maneuver to stay ahead in the ever-evolving landscape of global energy dynamics, the International Energy Agency (IEA) has announced plans to accelerate the release of its initial 2025 oil demand forecast. This decision comes in the wake of OPEC’s recent move to expedite its own forecast by six months, setting the stage for a race to provide timely insights into the future of the oil market.
Toril Bosoni, the head of the IEA’s Oil Industry and Markets Division, explained the decision, stating, “We plan to publish the 2025 forecast in April as opposed to June/July previously. The reason for this is that we will publish the Medium-Term outlook in June, so to avoid the overlap – and get a first detailed view on 2025 before looking out to 2030 – we advanced the date.”
While both OPEC and the IEA are influential in shaping oil market expectations, they differ in their perspectives on demand growth, particularly in 2024. This discrepancy reflects their contrasting outlooks on the speed of the global transition away from fossil fuels. OPEC envisions continuous growth in oil use over the next two decades, whereas the IEA, representing industrialized nations, anticipates a peak in demand by 2030.
This move by the IEA is a response to OPEC’s proactive approach in shifting its traditional timeline. OPEC, known for releasing its first forecast for the next year in July, recently surprised the industry by predicting a demand increase of 1.8 million barrels per day (bpd) in 2025. The organization justified its early release, citing the need to provide “long-term guidance for the market.”
The diverging opinions between OPEC and the IEA extend to their stances on investment in new oil supply. The IEA argues that the waning era of fossil fuel growth diminishes the rationale for such investments. In contrast, OPEC, breaking its tradition of a July release, recently predicted a 1.8 million bpd demand increase in 2025, justifying the early release as providing “long-term guidance for the market.”
This divergence was underscored by OPEC Secretary General Haitham Al Ghais, who published an article disputing the notion that demand was nearing a peak. He reiterated OPEC’s call for sustained investment in the oil industry.
Amidst global economic uncertainties and fluctuating demand strength, the oil market has faced challenges this year. OPEC forecasts a moderate slowdown in world oil demand growth to 2.25 million bpd in 2024, down from 2.46 million bpd in 2023, with total oil consumption averaging 104.4 million bpd, driven by air travel and road fuel demand.
In contrast, the IEA expects a significant reduction in oil demand growth in 2024 to 1.24 million bpd, compared to the 2.3 million bpd growth in 2023. This shift is attributed, in part, to the increasing global electric vehicle fleet curbing gasoline demand. As both organizations gear up for an intensified focus on 2025, the oil market remains in a state of flux, grappling with uncertainties related to the global economy and demand strength. OPEC predicts a moderate slowdown in world oil demand growth to 2.25 million bpd in 2024, down from 2.46 million bpd in 2023, while the IEA anticipates a more significant reduction in oil demand growth to 1.24 million bpd in 2024.
The disparity between OPEC and IEA demand forecasts for the current year amounts to approximately 1% of world demand, a figure nearly equivalent to the production of OPEC member Libya. This ongoing discrepancy highlights the complex and evolving dynamics influencing the global oil market.