Oil Demand on a Downward Trend as Growth Eases Back to Pre-Pandemic Levels

Recent reports indicate a significant deceleration in the growth of global oil demand, a trend that suggests a shift toward pre-pandemic patterns. This shift is primarily due to a slowdown in travel demand and economic activities. The International Energy Agency (IEA) has closely monitored these changes and provides insights into what this means for future oil demand.

Projected Weakening in Oil Demand Growth

The IEA's recent monthly report sheds light on the anticipated moderation in oil demand. Growth is expected to decline from the 2.3 million barrels per day seen last year to 1.2 million barrels per day in 2024. This projection outlines a landscape where the average oil demand could stabilize at around 103 million barrels per day. Interestingly, the IEA had initially anticipated a slightly lower growth rate for 2024.

The Impact of China's Economic Dynamics

The last quarter of the previous year marked a slowdown in oil demand growth, falling from 2.8 million barrels per day in the third quarter to just 1.7 million barrels per day. This decrease closely aligns with a reduced inclination for travel in China after experiencing a post-pandemic surge in demand. Despite these figures, China is expected to remain a heavyweight in terms of oil demand growth this year, with its petrochemical sector expansion playing a pivotal role.

oil, demand, trends