IEA sees slightly better oil demand outlook

Spanish Market: Crude oil
15/05/25

The IEA has nudged up its global oil demand growth forecasts for this year and 2026, citing better macroeconomic forecasts and the effects of lower oil prices.

In its latest Oil Market Report (OMR), published today, the Paris-based watchdog raised its projected increase in oil consumption by 20,000 b/d to 740,000 b/d in 2025, bringing overall demand to 103.9mn b/d.

It increased its oil demand growth forecast for 2026 by 70,000 b/d to 760,000 b/d.

In its previous OMR the IEA cut its oil demand forecasts for 2025 by 310,000 b/d after the US' announcement of an array of import levies in April. But the IEA said today the tariff supply shock appeared less severe than initially implied, pointing to subsequent US trade arrangements with the UK and China. US talks with other countries continue.

"Subsequent pauses, concessions, exemptions and negotiations are likely to attenuate the levies' permanence and economic impact," the IEA said.

But it said policy uncertainty continued to weigh on consumer and business sentiment, and it sees oil consumption growth slowing to 650,000 b/d between now until the end of 2025, from 990,000 b/d in the first quarter of the year.

Its demand growth forecast for 2025 is 320,000 b/d lower than at the start of the year.

The IEA increased its global oil supply growth forecast by 380,000 b/d to 1.61mn b/d in 2025, with almost all the rise accounted for by the Saudi-led unwinding of Opec+ cuts. It nudged its oil supply growth forecast for 2026 up by 10,000 b/d to 960,000 b/d.

Eight Opec+ members earlier this month agreed to continue accelerating the pace of their planned unwinding of 2.2mn b/d of crude production cuts for June.

The IEA again revised down its supply growth forecasts for the US, mainly because of the effects of lower oil prices on US shale producers. It downgraded US growth by 50,000 b/d to 440,000 b/d for 2025 and by 100,000 b/d to 180,000 b/d for 2026, and said US tight oil production in 2026 would contract on an annual basis for the first time since 2020.

The IEA said sanctions on Russia, Iran and Venezuela are a key uncertainty in its forecasts. It noted that Russian crude supply grew by 170,000 b/d in April as crude prices fell below the G7 $60/bl price cap.

The IEA's balances show supply exceeding demand by 730,000 b/d in 2025 and by 930,000 b/d in 2026. It said global observed stocks rose by 25.1mn bl in March, with preliminary data showing a further rise in April.

By Aydin Calik

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12/06/25

UK ETS emissions fell by 11pc on the year in 2024

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Malaysia’s oil, gas projects to emit 4bn t GHG: CREA

12/06/25

Malaysia’s oil, gas projects to emit 4bn t GHG: CREA

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Mexico inflation quickens in May

09/06/25

Mexico inflation quickens in May

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New Zealand official gas reserves fall by 27pc in 2024

05/06/25

New Zealand official gas reserves fall by 27pc in 2024

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Energy spend set to hit $3.3 trillion in 2025: IEA

05/06/25

Energy spend set to hit $3.3 trillion in 2025: IEA

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