Global oil demand is stronger than expected with robust growth in all economies across the board, oil industry executives at the CERAWeek conference have said this week, adding that they generally view the International Energy Agency’s (IEA) demand growth projections for this year as too conservative.
In its latest monthly assessment, the IEA raised last week its 2024 outlook on global oil demand growth, by 110,000 barrels per day (bpd) from the February report. The agency revised up its demand growth projection to 1.3 million bpd for 2024, compared to 1.2 million bpd expected in last month’s report.
Despite the increased demand growth outlook, the IEA’s view on oil consumption growth continues to be much more conservative than OPEC’s.
OPEC expects global oil demand to expand by a “robust” 2.2 million bpd in 2024, and to see another 1.8 million bpd annual growth in 2025.
Executives at the biggest independent oil traders see demand growth at around 1.5 million bpd this year, and some have pushed back their peak oil demand forecast to the early 2030s, Bloomberg reports.
The world’s largest independent oil trader Vitol, for instance, has pushed back its peak oil demand date to early next decade as it sees slower uptake of EVs, chief executive Russell Hardy told the conference in Houston.
Vitol also estimates that the threat of attacks by Yemeni Houthis on vessels crossing the Red Sea has added 100,000 bpd to global oil demand as ships choose to divert to the longer route around Africa, Hardy said at a CERAWeek panel.
Trafigura’s chief economist Saad Rahim told Bloomberg in an interview that oil demand is exceeding expectations and “The US economy, in particular, has surprised to the upside.”
“Oil demand has stayed very strong, both in the US and in other countries, both developed countries and emerging markets,” ConocoPhillips’ chief economist Helen Currie, told Bloomberg, noting that 2024 would be another year of record high demand across the board.
By Tsvetana Paraskova for Oilprice.com
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The solidity of oil market fundamentals and the robustness of demand are tangible enough for everyone to see except the IEA.
That is why if one needs objective projections about the state of the oil demand, the truthful way is to refer to OPEC+ data and completely ignore the IEA's.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert