For the first time this year, the International Energy Agency (IEA) has lowered its global oil demand forecast, citing a worsening economic outlook.
The world’s leading energy watchdog said oil demand is now on track to climb by 2.2 million barrels per day in 2023 and reach an average of 102.1 million barrels per day.
China is likely to account for 70% of oil demand growth moving forward, said the IEA in its latest projections.
The new forecast represents a downward revision of 220,000 barrels of crude oil per day. The IEA had previously predicted an increase of 2.4 million barrels of oil per day.
“Persistent macroeconomic headwinds, apparent in a deepening manufacturing slump, have led us to revise our 2023 growth estimate lower for the first time this year,” said the IEA in its report.
Looking ahead to 2024, the IEA expects demand growth to slow to 1.1 million barrels of crude oil per day.
The IEA has previously said that global oil demand will trickle to a halt in the coming decade as the transition away from fossil fuels gathers steam.
Crude oil prices have been trending lower over the past 12 months, falling from a peak above $120 U.S. a barrel reached in June 2022.
Brent crude oil, the international standard, is currently trading at $80 U.S. per barrel, while West Texas Intermediate (WTI) crude, the U.S. benchmark, is trading at $75 U.S. a barrel.
