BAKU, Azerbaijan, July 12. Global oil demand is expected to rise by just 700,000 barrels per day (kb/d) in 2025, marking the slowest annual growth since 2009, excluding the pandemic-hit year of 2020, according to the latest Oil Market Report from the International Energy Agency (IEA), Trend reports.
The revised forecast is slightly lower than last month’s estimate, largely due to weaker-than-expected deliveries in the second quarter of 2025. Global demand rose by only 550 kb/d year-on-year in Q2 — half the rate recorded in the first quarter.
The IEA attributes part of the slowdown to milder spring temperatures following a colder-than-usual winter that had temporarily boosted demand in OECD countries. However, a broader deceleration has also been observed, particularly in developing economies.
Among the hardest-hit markets were China, Japan, South Korea, the U.S., and Mexico — all of which recorded quarterly contractions. The IEA notes that while it may be too early to link these declines directly to rising global tariffs, the pattern suggests that trade tensions are starting to weigh on energy consumption.
Oil prices, which declined 13% quarter-on-quarter, have helped offset some of the impact of worsening economic conditions, particularly in emerging markets. A weaker U.S. dollar has also made crude oil more affordable outside the United States.
Looking ahead, the IEA expects demand growth to hold steady through the second half of 2025, with a modest improvement projected for 2026 — reaching 720 kb/d — as global monetary and fiscal policies begin to ease.
The report highlights that petrochemical feedstocks will account for two-thirds of oil demand growth in 2025, as they remain less affected by economic headwinds and electrification trends.
Regionally, non-OECD countries will remain the main drivers of global demand, adding 780 kb/d next year. However, growth in key markets such as China and India is expected to fall well below initial forecasts. Brazil is a notable exception, with revised estimates showing stronger-than-expected growth, supported by a resilient agricultural export sector.
