IEA Sees Slower Oil-Demand Growth to 2025 Amid Shift in Car Fuel

(Bloomberg) --

Following a contraction in this year and a bounce back in 2021, annual oil-demand growth is likely to slow to 2025, the International Energy Agency said in a report compiled before the market was thrown into chaos in recent days.

• Global oil demand will rise at an average annual rate of just below 1 million barrels a day to the middle of the decade, according to the IEA’s medium-term outlook.

Key Insights

• The deceleration in demand growth reflects changes in transport-fuel use as car efficiency standards improve and the take-up of electric vehicles expands.
• The IEA’s outlook was written before the oil market was upended by the sudden disintegration of the OPEC+ alliance and the initiation of a price war between Saudi Arabia and Russia.
• The predictions are also clouded by the spreading coronavirus. The global outbreak has led the agency to forecast a contraction in demand this year, but the situation remains “very fluid,” making it “extremely difficult” to assess the full impact, it said.

Know More

• Global oil demand will grow by 5.7 million barrels a day over the 2019-2025 period at an average annual rate of 950,000 barrels a day, according to the report. That’s a steep reduction on the 1.5 million-barrel-a-day yearly growth seen over the previous 10 years.
• Following an expected decline this year, growth is seen rebounding to 2.1 million barrels a day in 2021, then slowing to 800,000 a day by 2025 as transport-fuel demand growth stagnates.
• The IEA also published its monthly oil-market report on Monday.

--With assistance from Javier Blas.

To contact the reporter on this story: Amanda Jordan in London at ajordan11@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Helen Robertson, Rakteem Katakey

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