Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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By Tsvetana Paraskova – Sep 26, 2024, 6:00 PM CDT
- OPEC sees global oil demand growth this year at just over 2 million barrels per day.
- In its latest assessment, the IEA believes growth would be below 1 million bpd this year.
- The chasm between the two forecasting bodies has widened so much in the past two years that they now hold contrasting views on medium and long-term global oil demand and how the world should approach the energy transition.
The OPEC oil cartel and the IEA, the International Energy Agency created in response to the Arab oil embargo in the 1970s, have grown so far apart in their forecasts of global oil demand and energy system needs that their nearest-term and long-term demand projections are a world apart.
OPEC sees global oil demand growth this year at just over 2 million barrels per day (bpd), even after slightly lowering the estimate in the past two months.
In its latest assessment, the IEA believes growth would be below 1 million bpd. That’s a huge gap of 1.1 million bpd in the estimates, with just three months left in 2024.
The chasm between the two forecasting bodies has widened so much in the past two years that they now hold contrasting views on medium and long-term global oil demand and how the world should approach the energy transition.
OPEC May Have Overestimated 2024 Demand Growth
For this year’s oil demand growth, it looks like OPEC may have been overly optimistic when it pinned its hopes on China to drive more than 2-million-bpd growth when it published its first assessment for 2024 in July 2023.
A year later, in August 2024, OPEC revised down – for the first time – its 2024 demand growth estimate on the back of underwhelming data so far this year and expectations of softening Chinese demand growth.
Meanwhile, the IEA has been slightly, but consistently, revising down its much lower initial growth forecast during the course of this year.
Its latest estimate of 2024 global oil demand growth from earlier this month is for just a 900,000 bpd increase, due to rapidly slowing Chinese consumption. Global oil demand growth in the first half of 2024 was only 800,000 bpd year-on-year, the slowest pace of growth since 2020, the IEA said.
Related: Oil Plunges Over 2% on Rumor Saudis Ready To Increase Output
The main driver of the sluggish growth has been “a rapidly slowing China,” where oil consumption contracted on an annual basis for a fourth straight month in July, by 280,000 bpd,