Riyadh: Oil Demand Growth Expected to Slow in the Coming Years
Global oil demand growth is expected to slow in the coming years as the world continues its energy transition journey, according to a new analysis.
IEA Contradicts OPEC’s Forecast for Oil Demand Growth
In its latest report, the International Energy Agency said that the world will witness an oil demand growth of 1 million barrels per day in 2024, a projection that contradicts the forecast of the Organization of the Petroleum Exporting Countries.
IEA Analysis Highlights Market Strains and Spare Capacity
IEA noted in its analysis that lower oil demand in the coming years will ease market strains and push spare capacity toward levels unseen outside of the COVID-19 crisis.
Oil Companies Advised to Prepare for Energy Sector Changes
IEA’s executive director, Fatih Birol, emphasized the need for oil companies to navigate the changes currently occurring in the energy sector and prepare their business strategies accordingly.
Surging Sales of Electric Vehicles to Curb Oil Use
The report also highlighted that surging sales of electric vehicles and the substitution of oil with renewables or gas in the power sector will significantly curb oil use in road transport and electricity generation.
Emerging Economies to Drive Oil Demand in Coming Years
According to the report, global oil demand is forecasted to be driven by emerging economies in Asia, especially with higher oil use for transport in India and greater use of jet fuel and feedstocks from the petrochemicals industry in China.
Outlook of Refining Capacity
The report highlighted that global refining capacity is on track to expand by 3.3 million bpd between 2023 and 2030, well below historical trends, to meet the demand for refined oil products during this period.
OPEC Remains Confident About Oil Demand Growth
Amid IEA’s projected slowdown in oil demand growth, OPEC remains optimistic about the future, with the producers’ alliance believing its forecast is more accurate, according to Haitham Al-Ghais, secretary-general of OPEC.