OPEC, IEA Differ on 2024 Oil Demand Growth Estimates

In the latest analysis of oil demand forecasts, the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) appear to be at their most divided since at least 2008. This divergence in perspectives from two of the world’s most closely watched forecasters is sending mixed signals to the market regarding the strength of oil demand in 2024 and the anticipated pace of the global transition to cleaner energy sources.

According to Reuters research, the IEA, which represents industrialized nations, has projected that oil demand will increase by 1.22 million barrels per day (bpd) in 2024. In contrast, OPEC’s forecast anticipates a larger rise of 2.25 million bpd. This discrepancy amounts to roughly 1 percent of global demand, highlighting a significant difference in outlooks between the two organizations.

Neil Atkinson, a former head of the IEA’s Oil Markets Division, commented on the disparity, noting that the IEA expects the energy transition to progress more rapidly than OPEC does. He suggested that both agencies have entrenched themselves in their respective positions, leading to the current “enormous gulf in demand forecasts.”

To understand the context behind these differing forecasts, Reuters examined changes each agency made to its oil demand predictions from 2008 to 2023 and into the early months of this year. The selected period encompasses a range of market conditions, including the volatility sparked by the 2008 financial crisis and the unprecedented impacts of the 2020 pandemic on oil demand and its subsequent recovery.

As traders and investors navigate these mixed signals, the debate over the trajectory of oil demand growth continues to be a critical factor influencing market dynamics. The contrasting views also underscore the challenges in forecasting energy trends amid shifting economic landscapes and accelerating efforts to adopt cleaner fuel technologies.

Oil demand forecasts

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