The Organisation of Petroleum Exporting Countries (Opec) remains optimistic about a robust growth in oil demand for 2024 and 2025, with the global economy showing resilience in recent months. Opec Secretary General Haitham Al Ghais mentioned that for 2024, oil demand growth is expected to reach 2.2 million barrels per day (bpd), with total global demand averaging 104.5 million bpd. Going into 2025, the forecast shows a further robust expansion of 1.8 million bpd year-over-year, averaging 106.3 million bpd. This outlook aligns with projections made by Goldman Sachs, where analysts anticipate global oil demand to continue growing for at least another decade, driven by the slowing momentum of electric vehicle sales.
The recent monthly report from Opec highlighted a resilient global economy at the beginning of the year, suggesting additional upside potential in the second half, especially with possible easing of monetary policies. According to the group’s estimates, global oil demand saw a 2.4 million bpd increase in the first quarter of 2024, with the full-year total expected to hit 104.5 million bpd. This growth is attributed to strong air travel demand, healthy road mobility, and various industrial, construction, and agricultural activities in non-OECD countries. Despite certain downside risks, the momentum observed since the start of the year could create additional upside potential for global economic growth in the upcoming years.
Goldman Sachs raised its forecast for oil demand in 2030 to 108.5 million bpd, up from the previously expected 106 million bpd. The bank now predicts global oil demand to peak in 2034 at around 110 million bpd, followed by years of plateau demand until 2040. Analysts at Goldman Sachs anticipate a moderate decline in demand growth rate of 0.3% per year till 2040. The majority of the global oil demand growth is expected to come from emerging markets in Asia, with China and India leading the pack. Sales of electric vehicles globally have been slowing down, making hybrids and plug-in hybrids more competitive than initially thought, according to Goldman Sachs research analyst Kota Yuzawa.
As concerns about driving range and charging infrastructure increase, several automakers have conveyed that consumers are having second thoughts about purchasing electric vehicles, a trend that aligns with Goldman Sachs’ bear case for EV sales. As a result, the bank expects peak oil demand to occur by 2034, with a subsequent decline in annual growth rate till 2040. Most forecasters also anticipate China and India to be significant contributors to oil demand growth globally in the coming years. Overall, these factors point to a continued demand for oil and a positive outlook for the oil industry as a whole in the near future.
