Oil Demand Growing at a Slower Pace as Post-Covid Rebound Runs its Course

Photo-illustration: Unsplash (John Cameron)

Global oil demand growoilth is currently in the midst of a slowdown and is expected to ease to 1.2 million barrels a day (mb/d) this year and 1.1 mb/d in 2025 – bringing a peak in consumption into view this decade. This is primarily the result of a normalization of growth following the disruptions of 2020-2023, when oil markets were shaken by the Covid-19 pandemic and then the global energy crisis sparked by Russia’s invasion of Ukraine.

Despite the deceleration that is forecast, this level of oil demand growth remains largely in line with the pre-Covid trend, even amid muted expectations for global economic growth this year and increased deployment of clean energy technologies.

In both 2022 and 2023, global oil consumption rose by more than 2 mb/d as economies continued their recoveries from the Covid-19 shock and saw spikes in personal mobility, along with exceptional releases of pent-up demand for travel and tourism. While there are reasonable grounds for uncertainty about how complete the global recovery is, both oil demand data and mobility indicators suggest that its pace has slowed sharply and that the period of demand growth above the historical average is coming to an end.


Without a steep fall in oil prices, a sudden resurgence in the post-pandemic recovery or an acceleration in economic activity, it is unlikely that global oil demand growth will approach the levels seen in 2022 and 2023. Indeed, the pace of gains slowed substantially in the second half of 2023, and the latest data shows that the trend continued at the beginning of 2024.

Oil use increased by an estimated 1.6 mb/d year-on-year in the first quarter of 2024, down from 1.9 mb/d in the fourth quarter of 2023 and more than 3 mb/d during the middle of last year. Given that China was the last major economy to lift public health restrictions related to the pandemic and saw an abrupt economic recovery in mid-2023, this easing of year-on-year demand growth is likely to continue during 2024.

Read the whole article HERE.

Source: IEA