The Organization of the Petroleum Exporting Countries (OPEC) is predicting robust demand growth for oil in 2024, primarily driven by Asian economies. In its monthly market report, the Vienna-based oil producers group forecasts a healthy increase of 2.2 million barrels a day, following this year’s growth of 2.4 million barrels a day. This is the first time that OPEC’s forecast has included figures for the year 2024.
The majority of the demand growth, approximately 2 million barrels a day, will come from developing economies outside of the Organisation for Economic Co-operation and Development (OECD), with China and Middle Eastern countries leading the way. In contrast, demand in OECD members, including the United States and European nations, is expected to be lackluster at just 260,000 barrels a day next year.
Interestingly, the International Energy Agency (IEA) presents a markedly different view in its separate report released on the same day. The IEA projects a significant slowdown in oil demand growth next year, estimating it to be 1.1 million barrels a day, half of the current year’s amount.
The two energy forecasters have increasingly divergent opinions about the long-term outlook for oil demand. The IEA foresees a plateauing and eventual decline in demand for fossil fuels like oil due to the transition to more environmentally friendly energy sources, such as renewable power. However, OPEC argues that oil demand will continue to remain strong in the coming years, fueled by powerhouse economies like China and India. OPEC places less importance on the energy transition.
It is worth noting that the IEA recently stated that oil demand is expected to peak within this decade, largely due to the widespread adoption of electric vehicles.
Overall, while there are differing viewpoints among industry experts, OPEC remains optimistic about the sustained demand for oil in the near future.