OPEC in its December oil market report highlights that in the OECD economies, the healthy growth observed in the US during 2024 is expected to moderate only slightly in 2025. However, current growth projections could be impacted by potential new policy measures being discussed by the incoming US Administration, such as trade tariffs, which would also impact growth in US trading partner economies.
According to OPEC, solid economic growth trends have continued in recent months, with particularly positive trends recorded in the US, Brazil, and Russia. Additionally, Chinese stimulus measures and sustained growth momentum in India have contributed to supporting global economic growth. With these developments, the global economic forecast for 2024 is projected at 3.1%. The robust economic growth dynamic is expected to extend into 2025 with a forecast of 3.0%.
Furthermore, in the Eurozone, a gradual recovery continued in 3Q24, but limited improvements are anticipated in 4Q24 and into 2025. Japan is projected to rebound in 2H24 and into 2025, following a challenging period since 1H24. In the non-OECD, China’s robust fiscal and monetary stimulus efforts are anticipated to help the government achieve growth rates near its 5% target following an observed slowdown in 2Q24 and 3Q24. India has witnessed slower economic growth in 3Q24 compared to 1H24, but is projected to rebound in 4Q24 with increased support for the manufacturing sector.
Brazil and Russia continue to see strong growth rates, although inflation remains a concern heading into 2025. Overall, while uncertainties persist, global economic growth is expected to remain well-supported in the near term. The continuation of positive economic growth trends in 2024 and into 2025 is expected to play a crucial role in shaping global oil demand. Global oil demand is forecast to grow by 1.6 mb/d, y-o-y, in 2024. This is primarily driven by the non-OECD region, which is forecast to increase by 1.5 mb/d, y-o-y.
In addition, steady economic growth in China, supported by sustained economic activity in India and other non-OECD consuming countries, are expected to be the major oil demand growth drivers. Within the OECD region, OECD Americas is anticipated to drive demand growth with an increase of 0.1 mb/d, y-o-y, given steady jet fuel increases and robust gasoline requirements. OECD Europe is set to add some support, while OECD Asia Pacific oil demand growth is expected to remain weak.
Looking ahead to 2025, global oil demand is forecast to rise by a healthy 1.4 mb/d, y-o-y. OECD oil demand is expected to increase by 0.1 mb/d, again predominantly in OECD Americas, although the other regions also exhibit some growth. In the non-OECD, a 1.3 mb/d, y-o-y, increase is projected, with China and Other Asia driving the growth, supported by India, the Middle East, and Latin America.
The forecast is based on assumed sustained economic and petrochemical activity across major consuming nations, which supports demand for transportation fuels and distillates in 2025. On the supply side, non-DoC supply is forecast to expand by 1.3 mb/d, y-o-y, in 2024. Notably, the US is expected to account for around 50% of this expansion, with a y-o-y liquids production increase of 0.7 mb/d. Other key contributors to this growth include Canada, Argentina, and China, while the UK is anticipated to experience a decline. In 2025, non-DoC liquids supply is forecast to expand by 1.1 mb/d, y-o-y.
Concluding, OPEC states that key growth drivers include US tight liquids, offshore start-ups in Latin America, the Gulf of Mexico, and the North Sea, as well as the expansion of oil sands assets in Canada. The US is again projected to lead growth, accounting for about 45% of the total, followed by Brazil, Canada, and Norway.
