BAKU, Azerbaijan, November 18. The U.S. Energy Information Administration (EIA) has forecasted a rise in U.S. distillate fuel consumption in 2025 following two years of declines, driven largely by a projected increase in manufacturing activity, Trend reports.
After experiencing slight reductions in manufacturing over the past two years, distillate fuel demand is set to grow by 4% (150,000 barrels per day) in 2025, reversing the downward trend observed in 2023 and 2024.
In 2024, U.S. distillate consumption is expected to average 3.8 million barrels per day, a 2% drop from 2023 and a 5% decrease compared to 2022 levels. However, the EIA anticipates that the anticipated recovery in industrial activity, supported by a lower Federal Funds rate, will boost fuel demand in 2025. The majority of the increase in consumption will come from manufacturers and truckers responsible for transporting goods, as production ramps up in response to broader economic conditions.
The consumption of U.S. distillate fuel, which includes petroleum distillate fuel, renewable diesel, and biodiesel, has been significantly impacted by a trend towards biofuels, particularly renewable diesel. While overall distillate fuel use has declined due to reduced manufacturing activity, the renewable diesel sector has grown rapidly, accounting for a large share of fuel demand in certain regions, particularly on the U.S. West Coast.
Renewable diesel consumption in the United States is projected to exceed 240,000 barrels per day by 2025, more than doubling its 2022 consumption levels. Renewable diesel, which is chemically identical to petroleum diesel, offers a drop-in alternative for diesel fuel users and has gained traction, especially in markets like the West Coast (PADD 5), where it accounts for approximately 86% of U.S. renewable diesel fuel consumption.
As the manufacturing sector continues its recovery, the EIA predicts that distillate fuel consumption will follow suit, with the sector relying on both petroleum-based products and biofuels to meet growing energy demands.
