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The International Energy Agency (IEA) has revised its oil demand growth estimates for Q4 2024 and Q1 2025, citing worsening macroeconomic conditions driven by global trade tensions.
Revised Oil Demand Forecasts
The agency now expects global oil demand to increase by 1.03 million barrels per day (bpd) in 2025, down from the previous 1.1 million bpd forecast. This brings the total average daily demand to 103.9 million bpd.
However, the IEA’s forecast is significantly lower than OPEC’s projection of a 1.45 million bpd increase.
Current Oil Market Conditions
- Brent Crude Futures are trading around $71 per barrel.
- West Texas Intermediate (WTI) Crude Futures are near $67 per barrel.
Oil Supply Expected to Outpace Demand
The IEA now projects that global oil supply will exceed demand by approximately 600,000 bpd—a larger surplus than previously estimated.
Additionally, if OPEC+ raises output beyond April and compliance among over-producing members remains weak, an extra 400,000 bpd could enter the market.
Trade Tensions and Economic Risks
The IEA has expressed concerns over the impact of new U.S. tariffs on global trade and economic growth. The agency highlighted the uncertainty surrounding potential retaliatory actions, which could further dampen oil demand growth.
Stagflation Risks in 2025
The IEA warned that a scenario of stagflation—characterized by slow economic growth alongside rising prices—could make it more difficult for policymakers to intervene, further pressuring oil demand.
Oil Supply Outlook for 2025
Total global oil supply is projected to average 104.5 million bpd, with non-OPEC+ producers contributing an additional 1.5 million bpd.
Market Outlook: Oil Prices Under Pressure
With weaker demand growth and rising supply, oil prices could remain under pressure in the coming months, particularly if economic conditions continue to deteriorate.
