Opec trims oil demand for next four years, says no peak in sight

VIENNA – Opec has cut its global oil demand forecasts for the next four years as

Chinese growth slows

, even as it lifted its longer-term view, based on rising consumption in the developing world, and said there was no sign that oil use has reached its peak.

The Opec+ producer group, comprising the Organisation of the Petroleum Exporting Countries plus allies including Russia, is pumping more barrels to regain market share after years of cuts to support the market. Lower medium-term demand could make it harder for the group to unwind its other cuts, which remain in place until the end of 2026.

World demand will average 105 million barrels per day (bpd) in 2025, Opec said in its 2025 World Oil Outlook published on July 10. It expects demand to grow to an average of 106.3 million bpd in 2026, and then climb to 111.6 million bpd in 2029.

The forecasts for

demand in 2026

through 2029 are all lower than for 2024. Demand will average 106.3 million bpd in 2026, Opec said, down from the 108 million bpd seen in 2024. The 2029 forecast is down 700,000 bpd from the 2024 figure.

Compared with other forecasters, Opec expects demand to grow for a longer period. BP and the International Energy Agency (IEA) expect oil use to peak in this decade.

“Oil underpins the global economy and is central to our daily lives,” said Opec secretary-general Haitham Al Ghais in a foreword to the report. “There is no peak oil demand on the horizon.”

Opec is launching the report at its biennial seminar in Vienna, which brings together oil ministers and executives. It has withheld access to the seminar to reporters from Reuters and several other news organisations, but declined to comment on why it was doing this.

In the report, Opec said demand has completed its recovery from the Covid-19 pandemic, resulting in a more predictable outlook. Growth is also slowing in China, it said, the country that has driven oil use higher for the last few decades.

“This comes on the back of slower economic growth, the faster penetration of EVs and related charging infrastructure, and continued oil substitution in several sectors,” Opec said with reference to China.

Opec+ began to unwind output cuts of 2.17 million bpd in April with a production boost of 138,000 bpd. Hikes of 411,000 bpd followed each month in May, June, July, and now August.

The group still has separate cuts of 3.65 million bpd in place until end-2026. Two Opec+ delegates said on July 10 there has been no discussion yet on releasing that extra oil.

Gaps

Opec kept its forecast that demand in 2030 will average 113.3 million bpd, unchanged from 2024.

By contrast, the IEA expects global demand to peak at 105.6 million bpd by 2029, and then fall slightly in 2030, said the adviser to industrialised countries in June.

For the longer term, Opec expects India, the Middle East and Africa to drive growth.

Developments such as the US’ exit from the United Nations climate pact and a slower electric vehicle penetration rate in Europe is likely to influence behaviour and lead to a slower energy transition in developing countries with high energy needs, Opec said.

Opec expects world oil demand to reach 122.9 million bpd by 2050, up from 120.1 million bpd expected in the 2024 report. That is far above other 2050 forecasts from the industry such as that of BP.

Opec has been calling for more oil industry investment and said the sector needs US$18.2 trillion (S$23 trillion) to be spent to 2050, compared with US$17.4 trillion needed as estimated in 2024. REUTERS