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Informist, Thursday, Mar. 13, 2025

MUMBAI – The International Energy Agency has cut its forecast on the increase in global oil demand in 2025 to 1.0 million barrels per day from the 1.1 million barrels per day projected last month but up from 830,000 barrels per day in 2024. The agency sees the global oil demand in 2025 at 103.9 million barrels per day. The growth in demand is led by China, which accounts for 60% of the gains, with petrochemical feedstocks providing the entirety of the growth as demand for refined fuels reaches a plateau, it said.

Macroeconomic conditions underpinning oil demand projections deteriorated over the past month as trade tensions escalated between the US and several other countries, the agency said. New US tariffs and escalating retaliatory measures have tilted macro risks to the downside, it said. "Amid an unusually uncertain macroeconomic climate, recent delivery data have been below expectations, leading to slightly lower estimates for 4Q24 (fourth quarter of 2024) and 1Q25 (first quarter of 2025) growth at 1.2 million barrels per day on year", the agency said.

In terms of supply, the world oil supply rose by 240,000 barrels per day in February to 103.3 million barrels per day, led by the Organization of Peroleum Exporting Countries and allies, the energy watchdog said. Kazakhstan pumped at an all-time high as Tengiz ramped up, while Iran and Venezuela boosted flows ahead of tighter sanctions. The global oil supply may exceed demand by around 600,000 barrels per day this year, it said.

Non-OPEC+ production is set to rise by 1.5 million barrels per day in 2025, led by the Americas. Following a 770,000 barrels per day output decline last year, OPEC+ output could hold steady in 2025 if voluntary cuts are maintained after April, it said. 

Global crude refinery runs dropped by 570,000 barrels on month to 82.8 million barrels per day in February, extending their decline from December's five-year high of 84.3 million barrels per day on planned and unplanned outages. Throughputs are forecast to average 83.3 million barrels per day in 2025, up 570,000 barrels on year as lower OECD (Organisation for Economic Co-operation and Development) activity partly offsets a 930,000 barrels annual increase in the non-OECD, the agency said. Refining margins recovered in February, as falling crude prices lifted profitability in all regions, it said.

Global observed oil stocks fell by 40.5 million barrels in January, of which 26.1 million barrels were products. Non-OECD crude stocks declined by 45.3 million barrels, dominated by China where imports declined, the Paris-based agency said. Total OECD stocks rose by 11.2 million barrels, boosted by a 25 million barrels build in industry crude inventories. Oil on water fell by 6.7 million barrels. However, preliminary data for February show total global oil stocks rebounded, lifted by an increase in oil on water, it said.

Oil prices declined by about $7 per barrel in February and early March as macro sentiment soured amid escalating trade tensions, clouding the outlook for oil demand growth. Plans by OPEC+ to start unwinding voluntary production cuts in April added to the expectation of comfortable crude balances in 2025, the energy watchdog said.  End

US$1 = INR 86.99

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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