The International Energy Agency (IEA) has forecasted a decline in global crude oil demand for the fourth quarter of 2023, slipping to 101.7 million barrels per day (mb/d). The agency attributes this reduction to a weaker global economic outlook, slowing crude oil demand growth.
The projection indicates a drop from a 2.8 mb/d increase in the third quarter of 2023 to 1.9 mb/d in the fourth quarter. The IEA points to challenges in Europe, Russia, and the Middle East, particularly affecting Europe’s manufacturing and industrial sectors. Factors contributing to the slowdown include higher interest rates affecting the real economy and increased petrochemical activity focused on China rather than other regions.
The IEA adjusted its global oil consumption growth forecast for the last three months of 2023 by almost 400 thousand barrels per day (kb/d). The main reason for this adjustment is the slower growth in crude oil demand than initially anticipated in Europe, Russia, and the Middle East.
Looking ahead to 2024, the IEA expects a significant slowdown in oil consumption growth to 1.1 mb/d, driven by slower economic growth, improvements in energy efficiency, and an increase in the use of electric vehicles.
Despite these adjustments, the IEA notes that the oil demand projections for 2023 were increased just a month ago due to robust demand in China and better-than-expected oil production in the United States and Brazil. However, the current adjustments reflect the normalization of demand patterns as the distortions caused by COVID-19 fade away.
