The Organization of the Petroleum Exporting Countries (OPEC) reaffirmed its forecast for robust growth in global oil demand in 2024, expecting a rise of 2.25 million barrels per day (bpd) in its latest monthly report released on Tuesday. This projection remains unchanged from last month’s estimate. The report also anticipates a further increase of 1.85 million bpd in 2025.
As OPEC+ — which includes OPEC and allies led by Russia — prepares to meet on June 1 to discuss the extension of voluntary oil output cuts, OPEC emphasized a positive economic outlook. “Despite certain downside risks, the continued momentum observed since the start of the year could create additional upside potential for global economic growth in 2024 and beyond,” the report stated.
OPEC+ has been reducing output since late 2022 to bolster the market, with the latest cut of 2.2 million bpd effective until the end of June, pending a potential extension. Diverging views on oil demand growth in 2024, partly due to varying expectations about the global shift to cleaner energy, have led to a wider split among forecasters. The International Energy Agency (IEA), representing industrialized nations and predicting oil demand will peak by 2030, forecasts an increase of 1.2 million bpd, with updated figures expected on Wednesday.
OPEC, however, maintains that oil consumption will continue to rise over the next two decades without forecasting a peak, Reuters news report said.
Shift in Focus to OPEC+
OPEC announced it would cease publishing calculations of global demand for its own crude, opting instead to focus on demand for oil from the broader OPEC+ group. This shift, according to OPEC, “demonstrates solidarity and unity” within the OPEC+ framework and eliminates “potential for misunderstanding.” Since 2016, OPEC+ has operated under the Declaration of Cooperation (DoC), which serves as the current framework for market collaboration.
An OPEC+ source highlighted that this change reflects the growing relevance of OPEC+ demand, given the DoC’s role in market cooperation. The report projected 2024 demand for DoC crude at 43.2 million bpd, against a global oil demand of 104.5 million bpd. In April, OPEC+ produced 41.02 million bpd, which is below the expected demand. OPEC’s own production in April was 26.58 million bpd, marking a decrease of 48,000 bpd from the previous month.