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IEA Downgrades 2024 Oil Demand Growth Forecast as Prices Heat up

An oil pumpjack is shown near the Callon Petroleum vicinity on March 27, 2024 in Monahans, Texas. 

Brandon Bell | Getty Images

The International Energy Agency on Friday downgraded its forecast for 2024 oil demand growth, citing “exceptionally weak” OECD deliveries, a largely complete post-Covid-19 rebound and an expanding electric vehicle fleet.

In its latest monthly oil market report, the IEA said it had revised down its 2024 oil demand growth forecast by around 100,000 barrels per day (bpd) to 1.2 million bpd.

The global energy watchdog said that it expected the pace of expansion to decelerate even further to 1.1 million bpd next year “as the post-Covid 19 rebound has run its course.”

The IEA’s report comes amid a rebound in oil prices on elevated Middle East tensions, with energy market participants closely monitoring the prospect of supply disruptions from the oil-producing region.

Iran, which is a member of the Organization of the Petroleum Exporting Countries, has vowed to retaliate after it accused Israel of bombing its embassy in the Syrian capital of Damascus earlier this month.

The attack has ratcheted up tensions in a region already grappling with the ongoing Israel-Hamas war. Israel has not claimed responsibility for the attack.

International benchmark Brent crude futures with June delivery traded 0.8% higher at $90.42 per barrel on Friday morning in London, while U.S. West Texas Intermediate futures with May delivery rose 0.9% to trade at $85.76 per barrel.

“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,” the IEA said in the report.

“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,” the energy agency added.

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