Global oil demand growth to slow in 2025 – IEA report

Global oil demand growth is expected to slow this year as weaker economic conditions and sluggish non-OECD deliveries weigh on consumption, the International Energy Agency (IEA) said on Wednesday.
According to the IEA’s August Oil Market Report, global oil demand growth is projected to slow to 680,000 barrels per day (bpd) year-on-year in 2025, from 860,000 bpd last year, largely due to a weaker economic outlook. The projection is 20,000 bpd lower than the Agency’s previous forecast, mainly because non-OECD deliveries continue to fall short of expectations. Demand growth is expected to remain roughly the same in 2026, at 700,000 bpd.
The slowdown is most visible in China, India, and Brazil, the frontrunners in global demand growth in both 2024 and 2025, after June and July delivery data came in weaker than expected, the IEA said. The three countries have also been hit with US trade tariffs of up to 50%, adding to the economic headwinds for emerging markets. Nigeria has recently joined these non-OECD heavyweights, with demand boosted by a sharp pickup in economic activity from wide-ranging domestic reforms. The West African country’s 100,000-bpd increase in 2025 is second only to India’s gains.
The report also shows that global oil supply was flat in July at 105.6 million bpd, as a 230,000-bpd drop in OPEC+ output was offset by an equal increase from non-OPEC+ producers. Saudi Arabia led OPEC+ losses, with output falling 280,000 bpd from its June high, while Iran and the United Arab Emirates posted the largest gains.
Non-OPEC+ production rose by 230,000 bpd, supported by the return of Canadian heavy oil from maintenance. Global oil output in July was 2.2 million bpd higher year-on-year, with non-OPEC+ accounting for 1.3 million bpd of the increase. The report noted that on Aug. 3, the OPEC+ group of eight countries announced plans to raise output by 547,000 bpd in September, completing the unwinding of 2.2 million bpd of voluntary cuts agreed to in November 2023 and adding a 300,000 bpd quota increase for the United Arab Emirates. Based on the latest agreement and incorporating compensation cuts, total OPEC+ production in September is forecast at 43.3 million bpd, 630,000 bpd above July levels, with Saudi Arabia accounting for 460,000 bpd of the increase. The group marked a milestone by ending the cuts a year ahead of schedule and removing the first of three tranches totaling about 5.86 million bpd agreed to since 2022. Two additional rounds of supply reductions remain, raising the prospect of more barrels coming to market later this year or in 2026. Despite unwinding nearly 1.4 million bpd of cuts on paper from April to July, only about 640,000 bpd of additional crude actually reached the market, with Saudi Arabia providing 70% of the increase.