Opec on Wednesday forecast a decline in crude oil demand growth in 2025 but said fuel consumption would be driven by solid economic activity in China.
Global oil demand is expected to grow by 1.8 million barrels per day next year, down from Opec's estimate for this year of 2.2 million bpd, the group said in its monthly oil market report on Wednesday.
Opec usually releases its projections for the upcoming year during the second half of the year. The outlook for 2024 was released in November.
“Bringing forward the publication of the 2025 forecast … is part of the continued commitment of the Opec organisation to offer more transparency and support for both consumers and producers,” the group said.
“The undertaking to reach beyond the previously established time horizon of short-term forecasting serves to support the understanding of market dynamics and to support the continued commitment of [Opec+].”
The group expects non-Opec supply to grow by 1.3 million bpd in 2025, in line with its estimate for this year.
This year, the demand for Opec crude is expected to be 28.5 million bpd, surpassing the estimated level for 2023 by 800,000 bpd. Opec crude consumption is projected to reach 29 million bpd in 2025, the group said.
Meanwhile, Opec’s oil production, excluding Angola’s output, increased by 73,000 bpd in December from the preceding month to average 26.7 million bpd, Opec said, citing secondary sources.
Angola, Africa’s second-largest oil producer, last month announced its departure from the oil producer’s alliance after a dispute over production quotas.
The country, which joined Opec in 2007, has a production of about 1.1 million bpd.
Opec also said it expected the global economy to grow by 2.8 per cent next year, up from this year’s estimate of a 2.6 per cent expansion.
The increase would be driven by a recovery from low levels of growth in Organisation for Economic Co-operation and Development (OECD) economies in 2024.
“Non-OECD economies … are set to continue their healthy growth levels and be responsible for a large part of next year’s global economic growth,” the group said.
“This development is under the assumption that general inflation will continue retracting in 2024 and beyond.”
Meanwhile, the US Energy Information Administration expects global liquid fuels consumption to increase by 1.2 million bpd in 2025, down from its projection of an expansion of 1.4 million bpd this year.
“We attribute the reduction in growth to slowing oil demand growth in China due to stalling GDP growth, increasing vehicle fleet efficiency, and an end to pandemic recovery-related growth in 2023,” the EIA said in its Short-Term Energy Outlook last week.
Despite lower oil demand growth, global consumption of liquid fuels will still reach a new record of more than 103.5 million bpd in 2025, the EIA said.
In a separate statement on Wednesday, Opec's secretary general said projections indicating a peak in oil demand were likely to be as inaccurate as previous forecasts that suggested the crude supply was reaching its highest point.
"Ultimately, peak oil supply has never come to pass, and predictions of peak oil demand are following a similar trend," Haitham Al Ghais said.
"Time and again, oil has defied expectations regarding peaks. Logic and history suggest that it will continue to do so."
The International Energy Agency expects global demand for oil and gas to peak by 2030 or earlier, amid the rapid adoption of renewable energy and electric vehicles.
Mr Al Ghais said it would be a "challenge" to see peak oil demand mere six years away, given faster industrialisation in developing countries and policymakers re-thinking their energy transition strategies.
"Moreover, technological improvements are allowing us to not only find new resources, but enabling us to take huge strides in reducing emissions," he said.
