The IEA said today it still expects global liquids supply capacity to vastly surpass demand by the end of this decade, but made some sizeable adjustments to the balances of key consumers China and the US.
In its medium-term Oil 2025 report, the IEA bumped up its 2030 liquids supply capacity forecast by almost 1mn b/d, to 114.7mn b/d. It forecasts actual supply to market at 107.2mn b/d in 2030.
It still sees oil demand peaking in 2029 at 105.5mn b/d, and falling by 50,000 b/d in 2030.
The IEA said the slowing oil demand growth is caused by below-trend economic expansion, global trade tensions and a faster move away from oil in transport and power generation.
The IEA sees virtually no oil demand growth in China between now and 2030, compared with an almost 1mn b/d increase in its projection made last year. It forecasts Chinese oil demand to peak at 16.95mn b/d in 2027 and fall to 16.66mn b/d by 2030, only just higher than 16.63mn b/d in 2024.
Its previous projection for China's 2030 oil demand was 18.06mn b/d. The main reason for the downward adjustment is the country's rapidly expanding uptake of electric vehicles (EVs), driven by new policy initiatives, the IEA said.
By contrast, the IEA now expects US oil demand to fall at a much slower rate between now and 2030. The watchdog sees US demand at 20.01mn b/d in 2030, around 1.1mn b/d higher than its previous forecast. US demand was 20.42mn b/d in 2024.
The main reason for the upwards adjustment to 2030 US demand is higher than previously forecast economic growth, lower pump prices and slower expected EV adoption, the IEA said.
In terms of supply, the IEA noted the pace of US liquids production growth is slowing because oil firms are scaling back investments in the face of lower oil prices. Still, the country remains the largest contributor to non-Opec+ growth between 2024 and 2030, which is forecast at 3.1mn b/d.
Growth is dominated by NGLs and other non-crude liquids, the IEA said.
The IEA said its forecasts are subject to substantial uncertainties, however, pointing to conflicts in the Middle East and ongoing trade negotiations.
