Oil Shortage Looms Ahead with Supply Deficit

The IEA reports that the global oil supply will fall short by over 1 million barrels per day by 2025, despite OPEC+ cuts. Chinese demand continues to slump, impacting growth, though a slight rise in 2024 demand is anticipated due to OECD gasoil consumption.

A significant shortfall in the global oil supply is on the horizon, according to the International Energy Agency's (IEA) latest report. The agency forecasts a deficit of over 1 million barrels per day by 2025, even with current OPEC+ production cuts in place.

The Paris-based IEA has left its 2025 oil demand growth forecast mostly unchanged, anticipating a rise of 990,000 barrels per day next year. However, waning demand from China is casting a shadow over these projections. For the third quarter, China’s oil consumption was 270,000 barrels per day lower compared to the same period in 2023, following six months of consistent declines.

Nonetheless, the IEA has made a modest upward revision to its 2024 forecast, increasing it by 60,000 barrels per day to 920,000 barrels per day. This adjustment is attributed to higher-than-expected demand for gasoil in OECD countries during the third quarter. The global energy market continues to be in a state of flux, with geopolitical and economic factors playing pivotal roles.

(With inputs from agencies.)