IEA: Global oil demand held back by China’s economy

Global oil demand is set to grow at a more moderate pace, below the one million barrels per day mark, mainly due to the slowdown in the Chinese economy, according to recent forecasts by the International Energy Agency (IEA).

Share:

Growth in global oil demand, historically driven by China, is slowing considerably.
The International Energy Agency (IEA) reports that demand growth is now expected to remain below 1 million barrels per day (b/d), well below past forecasts of between 1.5 and 2 million b/d.
This slowdown is mainly attributable to the deceleration of the Chinese economy, once one of the driving forces behind global oil consumption.
Fatih Birol, Executive Director of the IEA, points out that China accounted for over 60% of the growth in global oil demand over the last decade.
However, the world’s second-largest economy is now posting annual growth of around 4%, a far cry from the double-digit performance seen just a few years ago.
This economic decline is directly reflected in the downward revision of short- and medium-term oil consumption forecasts.

Global production up despite slowdown in demand

While demand for oil is growing at a slower pace, global production continues to rise.
According to analysts at S&P Global Commodity Insights, non-OPEC (Organization of the Petroleum Exporting Countries) production is set to increase by 1.55 million barrels per day by the first quarter of 2025.
This increase is largely driven by the “American quartet” comprising the USA, Canada, Brazil and Guyana.
Thanks to their extraction and production projects, these countries are helping to keep supply high, thereby creating downward pressure on oil prices.
Canada, in particular, stands out with a projected increase of 315,000 barrels per day by early 2025.
This growth is linked to the resumption of activity in the oil sands, following the maintenance work carried out in the second quarter of 2024.
At the same time, projects to de-bottleneck Canadian production infrastructures will further increase export capacity, reinforcing the positive supply dynamic.

A direct impact on crude oil prices

The combined effects of slowing demand and rising global production are already being felt on financial markets.
The price of a barrel of West Texas Intermediate (WTI) for delivery in November fell by 63 cents to USD 70.37.
This drop is mainly due to the gloomy economic outlook in the United States and Europe, where manufacturing indexes are down.
Oversupply is also helping to keep prices in check, despite geopolitical tensions, particularly in Libya and the Middle East.
Although these regions are facing production disruptions due to internal conflicts, they have not been sufficient to reverse the downward trend in crude prices.

Prospects for non-OPEC producers

In this context, non-OPEC producers are playing an increasingly central role in the market balance.
Continued increases in production in Canada, the United States, Brazil and Guyana are offsetting declines in some regions of the world.
The United States, with its dynamic oil sector, continues to be a key player on the global energy scene, reinforcing its energy independence while flooding the market with new volumes.
Brazil, for its part, continues to develop its offshore oil fields, while Guyana, still in its infancy, sees its production prospects soar with new exploration projects.
Together, these countries make an essential contribution to global supply, guaranteeing the relative stability of the oil market despite geopolitical uncertainties.

Backbone Infrastructure Nigeria Limited is investing $15bn to develop a 500,000-barrel-per-day oil refinery in Ondo State, a major project aimed at boosting Nigeria’s refining capacity.
The Central Energy Fund’s takeover of the Sapref refinery introduces major financial risks for South Africa, with the facility still offline and no clear restart strategy released so far.
PetroTal Corp. records production growth in the second quarter of 2025, improves its cash position and continues replacing key equipment at its main oil sites in Peru.
An explosion caused by a homemade explosive device in northeastern Colombia has forced Cenit, a subsidiary of Ecopetrol, to temporarily suspend operations on the strategic Caño Limón-Coveñas pipeline, crucial to the country's oil supply.
Occidental Petroleum announces a decrease in its production in the Gulf of Mexico in the second quarter, citing third-party constraints, extended maintenance, and scheduling delays.
U.S. legislation eases access to federal lands for oil production, but fluctuations in crude prices may limit concrete impacts on investment and medium-term production, according to industry experts.
Permex Petroleum Corporation has completed a US$2mn fundraising by issuing convertible debentures, aimed at strengthening its cash position, without using intermediaries, and targeting a single institutional investor.
Petróleos de Venezuela S.A. (PDVSA) recorded $17.52bn in export sales in 2024, benefiting from increased volumes due to U.S. licences granted to foreign partners, according to an internal document seen by Reuters.
The detection of zinc in Mars crude extracted off the coast of Louisiana forced the US government to draw on its strategic reserves to support Gulf Coast refineries.
Commissioning of a 1.2-million-ton hydrocracking unit at the TANECO site confirms the industrial expansion of the complex and its ability to diversify refined fuel production.
Oil stocks in the United States saw an unexpected rise of 7.1 million barrels as of July 4, defying analyst expectations of a decline, according to the U.S. Energy Information Administration (EIA).
Petro-Victory Energy announces the completion of drilling operations for the AND-5 well in the Andorinha field, Brazil, with positive reservoir results and next steps for production.
The Colombian prosecutor’s office has seized two offices belonging to the oil company Perenco in Bogotá. The company is accused of financing the United Self-Defense Forces of Colombia (AUC) in exchange for security services between 1997 and 2005.
Indonesia has signed a memorandum of understanding with the United States to increase its energy imports. This deal, involving Pertamina, aims to diversify the country's energy supply sources.
VAALCO Energy continues to operate the Baobab field by renovating its floating platform, despite modest production. This strategy aims to maintain stable profitability at low cost.
An empty reservoir exploded at a Lukoil-Perm oil facility in Russia, causing no injuries according to initial assessments pointing to a chemical reaction with oxygen as the cause of the accident.
The British Lindsey refinery has resumed fuel deliveries after reaching a temporary agreement to continue operations, while the future of this strategic site remains under insolvency proceedings.
BP and Shell intensify their commitments in Libya with new agreements aimed at revitalizing major oil field production, amid persistent instability but rising output in recent months.
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.