OPEC forecasts strong global oil demand in 2024, 2025 driven by transportation fuels

Transportation fuels are set to drive oil demand growth in both 2024 and 2025.

Organisation of Petroleum Exporting Countries (OPEC) expects robust growth in global oil demand in 2024 and 2025, majorly driven by transportation fuels.

In an OPEC report released on March 12, the oil cartel said global oil demand is expected to expand by 2.2 million barrels per day (bpd) in 2024, and by 1.8 million bpd in 2025.

The oil demand would majorly come from non-OECD (Organisation for Economic Co-operation and Development) economies with an expansion of almost 2 million bpd y-o-y in 2024 and 1.7 million bpd in 2025, the report said. Oil demand growth from OECD economies is forecast at slightly above 0.2 million bpd y-o-y in 2024 and 0.1 million bpd in 2025.

The report added that transportation fuels are set to drive oil demand growth in both 2024 and 2025. “Jet fuel demand is forecast to show the largest y-o-y expansion, as international air traffic continues to recover and reach pre-pandemic levels, supported by strong domestic air travel in all regions,” it said.

OPEC said gasoline or petrol requirements are expected to continue to see support from healthy levels of road mobility in major consuming countries and regions, such as China, the Middle East, India, and the United States. Meanwhile, diesel demand would be supported by both on-road diesel including trucking and solid industrial, construction, and agricultural activities in non-OECD countries, it added.

Petrochemical feedstock growth is poised to be supported by capacity additions as well as healthy petrochemical margins, mostly in China and the Middle East.

OPEC forecast an economic growth of 2.8 percent y-o-y in 2024, which would accelerate further to reach 2.9 percent y-o-y in 2025. The group backed the forecast on global economic growth showing better-than-expected performance towards the end of 2023. It expects growth trends to continue in 2024.

“In the most recently published data, the major economies of the US and India reported strong economic growth in 2H23, and growth in China, Brazil, and Russia kept a steady momentum. However, the Eurozone and Japan saw slight growth declines in 2H23,” the OPEC report said.