Opec sticks to its guns on oil demand growth

Opec has once again kept unchanged its bullish forecast for oil demand growth this year, even while others including Saudi state-controlled Aramco continue to see much lower levels of growth.In its latest Monthly Oil Market Report (MOMR), Opec forecasts oil demand to grow by 2.25mn b/d this year, a level that has not changed since the organisation first published its projection for 2024 in July of last year. It kept its demand growth projection for 2025 unchanged at 1.85mn b/d.

The group said growth this year will be driven by China, India and the Middle East and further supported by easing inflation rates throughout 2024 and 2025. It notes further upside potential for global economic growth if inflation cools faster than anticipated, allowing central banks to “consider more accommodative policies.”

Other forecasters see similar trends driving oil demand growth this year, but the scale of their growth projections is much lower. The IEA, for example, is guiding for an increase of 1.22mn b/d this year, while the US’ EIA sees growth of 1.4mn b/d. But the most intriguing comparison is between Opec and Aramco, the world’s largest oil producing company and the national champion of Saudi Arabia — the most influential Opec member.

Aramco’s chief executive Amin Nasser said on 10 March that he expects oil demand to grow by 1.5mn b/d in 2024, which is more than 700,000 b/d lower than Opec’s forecast.

The most notable change to Opec’s latest MOMR forecasts relate to oil supply. The group downgraded its non-Opec liquids production growth forecast by 120,000 b/d this year to 1.07mn b/d, following the decision by several Opec+ members to extend their latest voluntary supply cuts by three months to the end of June.For 2025, the group now sees non-Opec production growing by 1.40mn b/d, up by 130,000 b/d compared with its previous forecast. It said this upgrade is mainly due to base changes made in 2024.

Opec crude production fell by 200,000 b/d in February to 26.57mn b/d, according to an average of secondary sources that includes Argus. This puts the group’s production in February almost 1.9mn b/d below Opec’s projected call on its own members crude for 2024, which it sees at 28.46mn b/d.