OPEC maintains its forecast for a strong growth in global oil demand through 2024, with a notable increase expected in 2025. This growth is predicted to be led primarily by China and the Middle East.
According to Reuters, OPEC emphasizes continued investment in the oil industry, its stance differs from that of the IEA both regarding future demand and the need for new investments in oil supply, which highlights a dynamic and evolving global oil market scenario.
Contrasting views on long-term oil use
OPEC’s outlook differs from that of the International Energy Agency (IEA), which expects oil demand to peak by 2030 due to a global shift toward cleaner energy sources. OPEC, however, sees a continuous rise in oil use over the next two decades.
Demand growth and market dynamics
For 2025, OPEC projects world oil demand to increase by 1.85 million barrels per day to 106.21 million bpd. The 2024 forecast remains at a growth of 2.25 million bpd. These projections come amidst fluctuating oil prices and market uncertainties influenced by supply cuts and demand factors.
Early release of OPEC’s forecast
In a departure from its usual practice, OPEC released its 2025 prediction earlier than expected, aiming to provide long-term market guidance and insight into future market dynamics.
Global economic growth and oil consumption
OPEC anticipates global economic growth to increase to 2.8% in 2025, up from 2.6% this year, partly due to interest rate cuts. The increase in oil consumption is expected to be driven by China, the Middle East, and India.
Differing perspectives on oil demand growth
OPEC’s forecast for oil demand growth in 2024 is significantly higher than the IEA's current forecast. The IEA is scheduled to update its predictions, which currently suggest a reduction in oil demand growth for 2024.
Investment in oil supply
The debate between OPEC and the IEA extends to the need for investment in new oil supplies. While OPEC advocates for continued investment, the IEA suggests the era of fossil fuel growth is ending.
Production adjustments and market share
OPEC has implemented output cuts to support the market. Despite this, their oil production slightly increased in December, led by Nigeria. OPEC's market share has declined since 2017 but is expected to recover over time.
Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela, are part of OPEC, which was founded in 1960 with the aim of unifying oil prices and production in the world.
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