BAKU, Azerbaijan, November 18. Despite continued production restrictions from OPEC+ nations, global crude oil prices have remained relatively flat in 2024, largely due to slower-than-expected growth in oil demand, said the U.S. Energy Information Administration (EIA), Trend reports.
The agency forecasts that global consumption of liquid fuels will rise by just 1.0 mb/d in 2024, followed by a modest 1.2 mb/d increase in 2025, both falling short of the pre-pandemic 10-year average of 1.5 mb/d annual growth.
The EIA attributes the subdued demand growth to several factors, including economic slowdowns and shifts in energy consumption patterns. Non-OECD countries, particularly in Asia, are expected to account for nearly all of the global increase in oil demand, with India emerging as the primary driver. The EIA predicts that India’s consumption of liquid fuels will grow by 0.3 mb/d in both 2024 and 2025, primarily fueled by a surge in demand for transportation fuels.
In contrast, China, the world’s largest oil importer, will see more muted growth in its petroleum and liquid fuels consumption. The EIA forecasts a marginal increase of less than 0.1 mb/d in 2024, with consumption rebounding to nearly 0.3 mb/d in 2025. This revision comes after the EIA adjusted its China consumption projections multiple times in 2024. Factors such as rapid growth in electric vehicle ownership, an increasing shift toward LNG for freight transportation, and a cooling economic outlook have all contributed to the limited growth in China’s oil demand.
The EIA's outlook for global oil demand growth remains significantly lower than the rapid recovery seen in the aftermath of the pandemic, when oil demand surged as economies reopened. The weaker-than-expected demand growth this year is seen as a key factor in keeping oil prices relatively stable despite OPEC+ efforts to curb supply.
Looking ahead, the EIA expects that the global oil market will continue to face challenges in balancing supply and demand. Although OPEC+ production cuts have helped limit supply, the ongoing weak growth in global oil consumption is likely to keep crude prices from rising significantly in the near term.