OPEC maintained its prediction for robust global oil demand growth in 2024 and surprised with an early forecast projecting a substantial increase in oil use in 2025, driven by China and the Middle East. This 2025 outlook aligns with OPEC's perspective that oil consumption will continue rising for the next two decades, in contrast to the International Energy Agency's forecast of a peak by 2030 due to a shift towards cleaner energy.
In its monthly report, OPEC stated that global oil demand is expected to increase by 1.85 million barrels per day in 2025, reaching 106.21 million bpd. The 2024 demand growth projection remains unchanged at 2.25 million bpd from the previous month. Despite these predictions, oil prices have faced uncertainty in the market, with concerns about demand offsetting the impact of OPEC's recent supply cuts, resulting in Brent crude trading around $77 per barrel, down nearly 2%.
OPEC Secretary General Haitham Al Ghais, on the same day as the 2025 forecast, emphasized in an article that oil demand was not nearing a peak, reiterating the group's call for sustained investment in the oil industry. Al Ghais argued against the idea of peak oil demand appearing in short- and medium-term forecasts, challenging the notion that it would occur by the end of the decade.
The 2025 prediction, an early release by OPEC, departs from its usual practice, with OPEC citing the desire to provide long-term market guidance as the reason for this deviation. OPEC anticipates increased global economic growth in 2025, projecting a rise to 2.8% from 2.6% in 2024, driven by factors such as interest rate cuts. China, the Middle East, and India are expected to lead the surge in oil consumption.
There is a notable disparity between OPEC and the International Energy Agency's (IEA) expectations for oil demand growth in 2024, with the IEA forecasting a halving of global oil demand growth due to below-trend economic growth, efficiency improvements, and an expanding electric vehicle fleet.
OPEC and the IEA not only differ in their views on demand but also in their opinions on the necessity for increased investment in new oil supply. OPEC has implemented output cuts to support the market, while the IEA argues that the end of the growth era for fossil fuels diminishes the rationale for heightened investment.
Despite OPEC's efforts, the report acknowledged a slight increase in OPEC oil production in December, led by Nigeria. OPEC's market share has declined over the years, currently standing at 26.5% of the world oil market, down from 33% in 2017, attributed to output cuts and the departure of some members. OPEC remains confident that non-OPEC supply growth will decelerate, leading to a recovery in its members' market share over time.