The International Energy Agency (IEA) revealed on Friday that oil demand growth next year is expected to be slower than previously anticipated, citing weak macroeconomic conditions, a sluggish recovery from the COVID-19 pandemic, and increasing use of electric vehicles. The Paris-based agency stated in its August monthly report that oil demand growth is projected to slow to one million barrels per day in 2024, a decrease of 150,000 barrels per day from its prior forecasts.
The agency added, "Global economic expectations still face challenges from rising interest rates and tightening bank credit, which pressure companies already dealing with slowing manufacturing and trade." Global oil demand is expected to grow by 2.2 million barrels per day in 2023, supported by air travel during the summer, an increase in oil use for electricity generation, and rising petrochemical sector activity in China.
The forecasts remain largely unchanged from previous agency estimates. The average demand is expected to be 102.2 million barrels per day this year, with China accounting for more than 70 percent of the growth, despite concerns related to the strength of China's economy, the world's largest oil importer. Demand reached a record level in June, reaching 103 million barrels per day. The IEA stated that August may see a new peak.
