The International Energy Agency (IEA) and the Organization of the Petroleum-Exporting Countries (OPEC) have presented conflicting visions for 2024 oil demand growth. While the IEA foresees a notable deceleration, lowering its projection to 880,000 barrels per day (bpd), OPEC remains optimistic, sticking to its estimate of a robust 2.25 million bpd surge, primarily driven by China-led growth.
The clash between these influential oil forecasters underscores ongoing disagreements concerning long-term oil demand outlooks and the necessity for fresh investments in supplies. The IEA’s revised figure reflects concerns about intensified global economic challenges and advancements in energy efficiency, factors poised to impact consumption, according to Reuters.
This discrepancy of 1.37 million bpd, equivalent to over 1% of daily global oil consumption, highlights the significant differences in their assessments. Oil demand growth is a critical indicator of market strength, directly influencing pricing, and subsequently, fuel expenses for consumers and businesses. Moreover, these projections play a pivotal role in shaping supply policy decisions for OPEC and its allies, collectively known as OPEC+.
“In 2024, solid global economic growth, driven by continuous improvements in China, is expected to bolster oil consumption,” noted OPEC in its monthly report, emphasizing the key role China’s economic landscape plays in the oil market dynamics.
While both agencies align closely in their assessments for this year, with the IEA revising its 2023 growth figure upward to 2.3 million bpd, this ongoing dispute underscores the intricate challenges and uncertainties defining the global oil sector, impacting economies and industries on a global scale.