By Sibel Morrow
World oil demand is predicted to fall by half in 2024 on the back of macroeconomic headwinds, tighter efficiency standards and an expanding EV fleet, according to the International Energy Agency's (IEA) latest report on Thursday.
In the Oil Market Report for December, the agency said global oil demand growth experienced a notable slowdown in the fourth quarter of 2023, falling to 1.7 million barrels per day (bpd), a significant decrease from the 3.2 million bpd rate during the second and third quarters of 2023.
Reflecting the unwinding of China’s post-pandemic travel demand surge, growth is projected to further ease from 2.3 million bpd in 2023 to 1.2 million bpd in 2024, influenced by various macroeconomic headwinds, including tighter efficiency standards and the expansion of the electric vehicle (EV) fleet.
The global demand landscape is heavily influenced by China, which is set to contribute to nearly 60% of this year’s increase in worldwide demand. Last year, China’s contribution was even higher, exceeding 75%, as the country recovered from its lockdowns.
- Global supply to reach new records in 2024
Record outputs from the US, Brazil, Guyana, and Canada drove record output, with global oil set to reach a new high of 103.5 million bpd this year.
Non-OPEC+ production is expected to dominate this year, contributing close to 1.5 million bpd in growth.
In contrast, the supply of 22 members of the OPEC+ group is forecast to remain relatively stable compared to last year, assuming that the extra voluntary cuts initiated recently are gradually phased out in the second quarter of 2024.
Supply from OPEC’s current 12 members rose by 50,000 bpd in December to 27.02 million bpd, while flows from the 10 non-OPEC nations edged around 20,000 bpd lower to 14.83 million bpd.
Higher flows from Nigeria and smaller increases from Iraq, Saudi Arabia and Kazakhstan offset losses in Iran, Kuwait and elsewhere.
However, production in January is expected to drop as the group’s extra supply curbs kick in and as protests force the closure of Libya’s largest oil field.