Non-OECD countries dominate the outlook, with forecast demand set to increase by 1.3 mb/d in 2024 and 1.2 mb/d in 2025.
That trend looks set to continue in 2024, when non-OPEC+ boosts output by a further 1.6 mb/d.
For context, the additional volumes from the United States, Brazil, Guyana and Canada alone could come close to meeting world oil demand growth for this year and next.
These four countries are set to once again produce at records-highs, adding a combined 1.2 mb/d in 2024 and 1 mb/d in 2025.
Although momentum slows in the United States, it still ranks as the world’s largest source of supply growth in 2024 and 2025, adding 650 kb/d and 540 kb/d, respectively.
Increased spare
Benchmark crude oil prices continued their upward trajectory in March and early April, as heightened geopolitical tensions coincided with the prospect of a tighter supply-demand balance through the remainder of the year. Brent crude futures breached the symbolic $90/bbl threshold on 5 April, up nearly $8/bbl from early March, reaching the highest level since October 2023, amid heightened tensions between Israel and Iran. Russian refinery outages added to product market unease, while OPEC+ put pressure on some countries to increase compliance with agreed voluntary production cuts through 2Q24.
Escalating oil supply security concerns are set against a backdrop of solid global oil demand growth of 1.6 mb/d in the first quarter and a more upbeat outlook for the global economy. World oil demand growth has nevertheless been revised down by roughly 100 kb/d since last month’s Report, to 1.2 mb/d, following exceptionally weak deliveries in the OECD at the start of the year. Our newly-released 2025 forecast in this month’s Report shows the pace of expansion will decelerate further, to 1.1 mb/d next year as the post-Covid 19 rebound has run its course. Non-OECD countries dominate the outlook, with forecast demand set to increase by 1.3 mb/d in 2024 and 1.2 mb/d in 2025. By contrast, consumption in the OECD will decline by 60 kb/d in both years. China continues to lead the growth even as its share of the global increase slumps from 79% in 2023 to 45% in 2024 and 27% next year.
Sustained output curbs by the OPEC+ alliance mean that non-OPEC+ producers, led by the Americas, will continue to drive world oil supply growth through 2025. OPEC+ market share has already slipped to all-time lows after the alliance removed close to 2 mb/d of supply from the market since the end of 2022, while non-OPEC+ ramped up by nearly the same amount. That trend looks set to continue in 2024, when non-OPEC+ boosts output by a further 1.6 mb/d. OPEC+ supply is projected to fall by 820 kb/d, provided cuts are maintained through the second half of the year. In 2025, global oil supply is forecast to increase by 1.6 mb/d to a new record of 104.5 mb/d, as non-OPEC+ lead gains for a third straight year, rising by 1.4 mb/d.
For context, the additional volumes from the United States, Brazil, Guyana and Canada alone could come close to meeting world oil demand growth for this year and next. These four countries are set to once again produce at records-highs, adding a combined 1.2 mb/d in 2024 and 1 mb/d in 2025. Although momentum slows in the United States, it still ranks as the world’s largest source of supply growth in 2024 and 2025, adding 650 kb/d and 540 kb/d, respectively.
Robust production from non-OPEC+ coupled with a projected slowdown in demand growth will lower the call on OPEC+ crude by roughly 300 kb/d in 2025, to an average 41.5 mb/d. If the bloc were to produce in line with that call, effective spare capacity could top 6 mb/d – excluding the Covid-19 period – its largest ever supply buffer.
