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Informist, Thursday, Feb. 13, 2025

MUMBAI – The International Energy Agency has forecast global oil demand growth to average 1.1 million barrels per day in 2025, slightly higher than the 1.05 million barrels per day projected last month and up from 870,000 barrels per day in 2024. China will marginally remain the largest source of growth, even as the pace of its expansion is a fraction of recent trends and driven almost entirely by its petrochemical sector, the agency said.

India and other emerging Asian economies will increase their shares of growth, contributing a combined 500,000 barrels per day to the global oil demand growth, it said. On the other hand, the demand from the Organization for Economic Cooperation and Development is forecast to return to structural decline following a modest increase last year, according to the agency.

World oil supply plunged 950,000 barrels per day to 102.7 million barrels per day in January, as seasonally colder weather hit North American supply, compounding output declines in Nigeria and Libya, the energy watchdog said. Supply was nevertheless 1.9 million barrels per day higher than a year ago, with gains led by the Americas. Global oil supply is on track to increase by 1.6 million barrels per day to 104.5 million barrels per day in 2025, with non-Organization of the Petroleum Exporting Countries producers accounting for the bulk of the increase if the cartel's voluntary cuts remain in place.

Fresh US sanctions on Russia and Iran roiled markets at the start of the year but they have yet to materially impact the global oil supply. Iranian crude oil exports are only marginally lower while Russian flows, so far, continue largely unaffected, it said.

Global crude runs fell by 1 million barrels per day to 82.9 million barrels per day in January as a cold snap and planned maintenance work reduced US runs. Sour crude refining margins collapsed in Asia in mid-January, as new US sanctions on Russia boosted Dubai crude prices. Atlantic Basin margins benefited from higher middle distillate cracks, the agency said.

Global observed crude oil stocks fell 17.1 million barrels on month to 7.6 billion barrels in December, as crude oil stocks plunged by 63.5 million barrels and product stocks rose by 46.4 million barrels. The Organization for Economic Cooperation and Development industry inventories continued to decline, by 26.1 million barrels to 2.7 billion barrels, 91.1 million barrels below their five-year average. Preliminary data show total global inventories falling a further 49.3 million barrels in January, led by a large crude stock draw in China, IEA said.

Oil market balances show total oil supply matched global oil demand at 102.9 million barrels per day last year. "It is still too early to tell how trade flows will respond to new US tariffs or the prospect thereof, and what the impact of the escalation of sanctions on Iran and Russia may be in the longer run. But time and again, oil markets have shown remarkable resilience and adaptability in the face of major challenges – and this time is unlikely to be different," the energy watchdog said in the report.  End

US$1 = INR 86.89

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Taniva Singha Roy

Edited by Saji George Titus

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