OPEC: Review of global oil demand trends

Oil demand grew by a considerable 2.5 mb/d in 2023, mostly driven by solid economic activity in non-OECD countries, led by a strong rebound from COVID-19-related lockdowns in China. In 2024, global oil demand growth is forecast to stand at a healthy 2.2 mb/d, to reach a level of 104.4 mb/d (105.47 mb/d in 4Q24). This is reflecting the robust economic growth expected this year. In the OECD, oil demand in 2024 is projected to rise by around 0.3 mb/d (see Graph 1). Within the region, OECD Americas is projected to lead 2024 oil demand growth, increasing by 0.2 mb/d, y-o-y.

OECD Europe and Asia Pacific are expected to grow by around 60 tb/d and 20 tb/d, y-o-y, respectively, showing improvement from the contraction seen in 2023. In the non-OECD, oil demand in 2024 is expected to grow by around 2.0 mb/d, y-o-y, having surpassed pre-pandemic levels already in 2022. Oil demand is projected to be driven by China, with expected healthy growth of 0.6 m/d y-o-y, further supported by the Middle East with an approximate increase of 0.4 mb/d, y-o-y.

Other Asia is seen increasing by 0.3 mb/d, y-o-y, and India growing by more than 0.2 mb/d, y-o-y. In terms of products, transportation fuels are forecast to be the main drivers of global oil demand. Consumption of jet/kerosene and gasoline is forecast to increase by 0.7 mb/d and 0.6 mb/d, y-o-y, respectively. Gasoline is expected to average well above pre-pandemic levels, while jet/kerosene is projected to average just below the level seen in 2019. Diesel is projected to expand by 0.3 mb/d, y-o-y, exceeding pre-pandemic levels for the second year, supported by healthy economic activity. Heavy distillates are projected to grow by 0.2 mb/d (see Graph 2). Light distillates are expected to grow by 0.5 mb/d on the back of healthy petrochemical sector requirements.

In the OECD, ongoing improvements in airline activities, combined with robust road mobility are expected to support jet/kerosene and gasoline as the main drivers of demand growth in 2024, growing by around 0.2 mb/d, y-o-y, each. Nonetheless, total volumes are expected to remain below 2019 prepandemic levels almost for all product groups. Only OECD demand for LPG surpassed pre-pandemic levels as early as 2021 and now stands 5% above the total demand seen in 2019, attributed to strong petrochemical sector requirements in OECD Americas. In 2024, however, LPG demand in the region is forecast to remain flat on a yearly basis. Gasoil/diesel is still forecast to show a y-o-y contraction in 2024, albeit to a lesser degree than a year earlier, due to an expected relative improvement in the manufacturing sector. In terms of products, non-OECD demand growth is expected to be led by y-o-y increases in jet/kerosene of around 0.5 mb/d, with total regional volumes almost reaching 2019 levels.

Gasoline is also expected to increase by almost 0.5 mb/d, y-o-y, with the total volume surpassing pre-pandemic levels by around 10%. Gasoil/diesel in the region is projected to grow by more than 0.3 mb/d, y-o-y, also having surpassed pre-pandemic levels back in 2021. Continued robust economic activity in China, global air travel recovery and expected healthy petrochemical feedstock requirements will be key for oil demand growth in 2024. However, inflation levels, monetary tightening measures and sovereign debt levels could weigh on global oil demand prospects in the current year. Looking ahead, world oil demand in 2025 is projected to expand by a healthy 1.8 mb/d, y-o-y, to reach 106.2 mb/d. Within the regions, the OECD is forecast to grow by 0.1 mb/d, y-o-y, and the non-OECD is expected to increase by 1.7 mb/d. Given current market circumstances, ongoing efforts by the countries participating in the Declaration of Cooperation (DoC) remain critical to achieving a balanced and stable oil market for the benefit of producers, consumers and global economy.Source: OPEC