The International Energy Agency (IEA) has revised up its %Oil demand forecast for the year ahead as it now sees a recovery in China due to government economic stimulus measures.
The Paris-based organization expects global oil demand in 2025 to expand by 1.1 million barrels per day, up from a previous estimate of 990,000 barrels a day.
The upwardly revised outlook comes as the IEA now expects that China, the world’s largest crude oil importer, will see demand growth of 220,000 barrels per day in 2025, which is an increase from an earlier estimate of 190,000 barrels a day.
China’s economy is likely to gather steam in coming months as the government in Beijing introduces additional measures aimed at stimulating growth, says the IEA.
Still, the demand growth for 2025 remains significantly lower than the growth experienced in 2023, which saw an increase of more than two million barrels of crude oil per day.
The IEA’s latest outlook reflects a weaker macroeconomic environment and changes in oil consumption patterns in the year ahead, said the agency.
The IEA’s latest forecast is markedly lower that the one issued by the Organization of the Petroleum Exporting Countries and its allies (OPEC+), which calls for demand growth of 1.45 million barrels per day in 2025.
Earlier in December, OPEC+ extended its voluntary production cut of 2.2 million barrels per day until the end of March 2025, with plans to gradually reduce those cuts over an 18-month period.
The IEA highlighted risks to its 2025 outlook, which include stagnation of Chinese oil demand, ongoing conflict in the Middle East, and political uncertainties in the U.S.
Brent crude oil, the international standard, is currently trading at $73.42 U.S. per barrel, while West Texas Intermediate (WTI) crude oil, the American benchmark, is at $70.24 U.S. a barrel.
