Key conclusions
1. According to the EIA, by the end of 2024 global demand for oil increased by 0.9 million bbl/d compared to 2023, and reached 102.8 million bbl/d. The bulk of global oil demand growth in 2024 was driven by non-OECD countries, especially in Asia, with India leading the way.
The growth rate of global demand declined below 1 million bbl/d for the first time since 2019 against a backdrop of weaker-than-expected demand in China. Although China’s demand growth in 2024 was positive, the growth rate declined relative to 2023 as a result of a slowdown in real GDP growth, population decline, increased sales of electric vehicles and also due to a larger and earlier than expected conversion of truck fleets to LNG fuel.
Analysts expect that demand growth in 2025 will remain moderate and not exceed the average rate of 2010-2019 (1.5 million bbl/d). At the same time, global demand dynamics in the future will largely be determined by oil consumption dynamics in China and India.
2. Despite OPEC+ production restrictions, according to EIA data, the oil supply in 2024 rose by 0.5 million bbl/d vs 2023 and stood at about 102.6 million bbl/d. The increase stemmed from non-OPEC+ countries: the US, Canada, Guyana, and others.
In December 2024 OPEC+ countries again postponed the introduction of measures to reduce voluntary restraints on oil production. A gradual rise in supply is now expected from Q2 2025.
Analysts expect that the supply will grow at a rate exceeding demand in 2025. However, the following elements of uncertainty factors can be observed: continued OPEC+ restrictions, the consequences of sanctions on Russian and Iranian oil exports, and the geopolitical situation in the Middle East.
In 2025, a further rise in US production is expected, however its intensity will be determined, on the one hand, by potential changes in the US energy policy, and on the other by price factors and the desire of US companies to maximise profits.
3. During 2024, despite the trend towards a slowdown in global oil demand, the market deficit remained predominantly stable, which, according to EIA data, was 0.2 million bbl/d on average. The key factor behind the deficit was the repeated postponement of reducing voluntary restraints on oil production by OPEC+ countries, as well as, according to EIA data, an actual reduction of oil production by alliance countries.
Analysts expect the market to remain in deficit in Q1 2025, but starting from Q2 2025, as OPEC+ production restrictions are gradually lifted and production from countries outside the alliance grows, the market may go into surplus as demand growth is forecast to moderate.
4. In Q4 2024 the trend towards a decline in oil quotations continued against a background of weakening geopolitical tensions in the Middle East and increased supply from non- OPEC+ countries.
Oil price forecasts for 2025 are highly consolidated. Analysts agree that in the short term prices will be determined by geopolitical factors, including sanctions, as well as oil production rates outside OPEC+.
Analysts’ mid- and long-term forecasts are increasing as a result of uncertainty over the future market balance.
The current long-term (post-2029) consensus forecast for the Brent crude price is around USD 71/bl, in real terms, in 2025 prices.
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