IEA, OPEC’s Views on Oil Demand Growth in 2024 Widen

Emmanuel Addeh in Abuja

The gap between two leading oil forecasters’ views on 2024 demand growth has widened, with the International Energy Agency (IEA) predicting a sharper slowdown while Organisation of Petroleum Exporting Countries (OPEC) stuck to expectations for buoyant China-led growth.

OPEC and the IEA, which represents industrialised countries, have clashed in recent years over issues such as the long-term oil demand outlook and the need for investment in new supplies.

In a monthly report, the IEA lowered its forecast for growth in oil demand in 2024 to 880,000 barrels per day from 1 million bpd, suggesting harsher global economic conditions and progress on energy efficiency will weigh on consumption.

By contrast, in its latest report OPEC stuck to its forecast that demand will rise by 2.25 million bpd in 2024. The difference between the two forecasts – 1.37 million bpd – is equivalent to more than 1 per cent of daily world oil use, Reuters said.

Oil demand growth is an indication of likely oil market strength, and can affect prices and fuel costs for consumers and businesses. It also forms part of the backdrop for supply policy decisions by OPEC and its allies, known as OPEC+.

Both forecasters are on roughly the same page for demand this year. The IEA raised its figure for this year’s growth to 2.3 million bpd, bringing it closer to OPEC’s forecast of 2.44 million bpd which it left unchanged.

The IEA said in its report it was seeing signs of demand being hit by rising prices and rising electric vehicle sales.