Markets were tight in August, as supply struggled to keep pace with peak summer demand – tipping the market into a deficit. But supply looks set to outpace demand in 2025, as non-OPEC+ producers see strong growth in their output.

Economic headwinds and electrification are holding back oil demand growth. Slower economic growth and the adoption of electric vehicles are weighing on the outlook for world oil demand in 2024 and 2025, according to the IEA’s Oil Market Report.

 The report sees global oil demand expanding by slightly less than 1 million barrels per day in both 2024 and 2025, largely in line with our recent forecasts – though a shift in the forces at work is becoming apparent. Oil demand in advanced economies, especially gasoline demand in the United States, has shown signs of strength in recent months. However, Chinese oil demand contracted for a third consecutive month in June, driven by a slump in industrial inputs, including for the petrochemical sector. Preliminary trade data point to further weakness in July.

/IEA/