OPEC has maintained its forecast for robust global oil demand growth in 2024 and 2025, projecting an increase of 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025.
These estimates remain unchanged from the previous month. OPEC attributes this growth to resilient economic performance and increased air travel, particularly in the Northern Hemisphere during summer, which is expected to boost transportation fuel demand, especially in the United States.
Despite a wide range of predictions from various forecasters about oil demand, largely due to uncertainties about the transition to cleaner energy, OPEC’s projections are on the higher end of industry expectations.
For instance, BP anticipates that oil demand will peak next year, a view it reaffirmed in its annual Energy Outlook. Contrastingly, the International Energy Agency (IEA) forecasts a significantly lower growth in demand for 2024, at 960,000 bpd, with an update expected soon.
OPEC+, which includes OPEC and allies like Russia, has been cutting output since late 2022 to support oil prices, with the latest reduction of 2.2 million bpd set to be phased out starting in October. OPEC also increased its forecast for global economic growth in 2023 from 2.8% to 2.9%, noting strong momentum in economies outside the OECD.
To remind, OPEC+ nations, which had previously committed to additional voluntary oil cuts in April and November 2023, convened to bolster their collective efforts in stabilizing oil markets. During the meeting, it was decided to extend the supplementary cuts of 1.65 million barrels per day (bpd) announced in April 2023 until December 2025.
The report also highlights an anticipated oil supply deficit in the coming months and into 2025, more pronounced than the shortfall predicted by the U.S. Energy Information Administration. Demand for OPEC+ crude is projected to reach 43.6 million bpd in the third quarter, exceeding current production levels.
