Global oil demand growth is currently in the middle of a slowdown and is expected to ease to 1.2 million barrels a day (mb/d) this year (-130 thousand barrels compared to the previous forecast) and 1.1 mb/d in 2025 – bringing a peak in consumption into view this decade.
The revision of the forecast for 2024 was due to lower-than-expected consumption in OECD countries and a decline in manufacturing activity.
Despite the deceleration that is forecast, this level of oil demand growth remains largely in line with the pre-Covid trend, even amid muted expectations for global economic growth this year and increased deployment of clean energy technologies.
Without a steep fall in oil prices, a sudden resurgence in the post-pandemic recovery or an acceleration in economic activity, it is unlikely that global oil demand growth will approach the levels seen in 2022 and 2023.
The pace of gains slowed substantially in the second half of 2023, and the latest data shows that the trend continued at the beginning of 2024.
Oil use increased by an estimated 1.6 mb/d year-on-year in the first quarter of 2024, down from 1.9 mb/d in the fourth quarter of 2023 and more than 3 mb/d during the middle of last year.
This easing of year-on-year demand growth is likely to continue during 2024.
The Chinese economy will remain the mainstay of global expansion this year. However, the growth in oil demand is projected to fall to 540 kb/d. In the absence of a dramatic acceleration in other countries, this will result in a wider global slowdown.
An expected slackening in economic growth, to a rate of between 4% and 5% in 2024 and 2025 – combined with the rapid domestic uptake of oil-substituting technologies such as electric vehicles (EVs) and high-speed rail – means that in 2024 and 2025, only a little over one-third of oil demand growth is expected to come from China.