The growing number of electric vehicles and economic challenges caused the global oil demand to slow down in the second quarter, resulting in increase of just 710,000 barrels per day year over year, according to an analysis.
The International Energy Agency stated in its most recent report that the second quarter’s demand growth was likewise the smallest since 2022’s fourth quarter.
Additionally, the think tank maintained its projection from last month of 970,000 bpd growth in oil demand in 2024.
The energy agency’s forecast runs counter to OPEC’s position, as the group of oil producers anticipates rapid increases in demand in 2024 and 2025.
OPEC stated in its monthly report on June 10 that markets such as China, the Middle East, India, and Latin America will drive a 2.25 million barrel per day and 1.85 million barrel per day increase in global oil demand in 2024 and 2025, respectively.
The IEA report explained its lower forecast by saying that Chinese consumption declined because the nation’s post-pandemic recovery had reached its limit. Global gains are expected to average slightly less than one million barrels per day in 2024 and 2025 due to headwinds from more vehicle electrification, better efficiency, and less than ideal economic growth.
“Demand for petrochemical feedstocks and industrial fuels was particularly weak,” the statement continued.
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