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Global oil demand growth continues to slow down amid underwhelming Chinese consumption, the International Energy Agency (IEA) said on Thursday, keeping its growth forecast at more than half of OPEC’s projected increase in demand.
World oil demand growth saw in the second quarter of this year growth of just 710,000 barrels per day (bpd) compared to Q2 2023. This was the slowest quarterly increase in oil demand since the fourth quarter of 2022, the IEA said in its closely-watched monthly Oil Market Report published today.
Chinese oil consumption contracted in April and May, as the post-pandemic rebound in the world’s top crude oil exporter “has run its course,” the IEA said.
“Oil consumption in China, long the engine of global oil demand growth, contracted in both April and May, and is now assessed marginally below year earlier levels in 2Q24,” the Paris-based agency said, adding that Chinese demand for industrial fuels and petrochemical feedstocks was particularly weak in the second quarter.
The annual decline in second-quarter estimated consumption in China is “in stark contrast to annual gains” of 1.5 million bpd last year and 740,000 bpd in the first quarter of this year.
The IEA kept is conservative forecasts of global oil demand growth for this year and next, expecting global demand to grow by 970,000 bpd in 2024 and by 980,000 bpd in 2025, largely unchanged from the June report.
The agency’s forecasts continue to diverge from OPEC’s estimates by a mile, or by more than 1 million bpd, to be precise.
OPEC kept on Wednesday its global oil demand growth forecast for 2024 at 2.2 million bpd—unchanged from the previous month’s assessment. In 2025, oil demand is forecast to show robust growth of 1.8 million bpd year-on-year, also unchanged from the June assessment, the cartel said in its Monthly Oil Market Report earlier this week.
By Tsvetana Paraskova
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However. China's demand is expected to surge during the second half of this year because China announces rises in its crude import quotas for independent refiners known as teapots sometime during the second half of the year.
Moreover, China's economy is growing this year at 5%, the fastest among all major economies with the exception of India. So it is expected that China's oil demand will match this growth.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert
he annual decline in second-quarter estimated consumption in China is “in stark contrast to annual gains” of 1.5 million bpd last year and 740,000 bpd in the first quarter of this year.