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OPEC forecasts steady global oil demand growth in 2025

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In its latest monthly report for January 2025, the Organization of the Petroleum Exporting Countries (OPEC) projected a global oil demand growth rate of 1.4 million barrels per day (mb/d) in both 2025 and 2026.

The forecast reflects expectations of robust global economic expansion and increased energy needs, underpinned by significant contributions from emerging economies.

OPEC highlighted that the non-OECD region will be the primary driver of oil demand growth, accounting for 1.3 mb/d of the total increase, while OECD countries will contribute a modest 0.1 mb/d, largely driven by the Americas.

“On a regional basis, OECD oil demand is forecast to expand by around 0.1 mb/d, year-on-year, entirely from the Americas, while non-OECD oil demand is expected to witness growth of around 1.3 mb/d, mostly in India, China, Other Asia, the Middle East, and Latin America,” the report stated.

Economic growth in key regions, including China, India, and the Middle East, alongside steady growth in developed economies such as the U.S., Eurozone, and Japan, is expected to fuel the demand.

OPEC anticipates global GDP growth of 3.1% in 2025 and 3.2% in 2026, assuming continued inflation normalization and supportive monetary policies.

Transportation fuels are poised to lead the demand surge. Aviation and road mobility, particularly in major consuming regions, are expected to see significant growth.

Gasoline demand will rise alongside increasing road mobility in China, India, the Middle East, and the U.S. Additionally, industrial activities, construction, and agricultural operations in non-OECD countries will support diesel consumption.

READ ALSO: OPEC oil output plunges as Nigeria, Iraq slash exports —Survey

The petrochemical sector is also set to boost demand for light distillates, driven by capacity expansions and improved margins in China and the Middle East.

On the supply front, non-OPEC liquids production is projected to grow by 1.1 mb/d annually in 2025 and 2026, driven by output from the U.S., Brazil, Canada, and Norway.

However, crude oil production by countries participating in the Declaration of Cooperation (DoC) fell by 14,000 barrels per day in December, averaging 40.65 mb/d.

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Ongoing geopolitical tensions and supply disruptions, including the war in the Middle East and U.S. sanctions on Russia and Iran, continue to distort global oil markets. Nigeria, despite being a member of OPEC, has struggled to capitalize on these disruptions due to issues like crude oil theft and inadequate investment in the oil sector.

While the Nigerian government has pledged to ramp up production to over 2 million barrels per day (bpd), surpassing its OPEC quota of 1.5 million bpd, achieving this target remains uncertain.

Dr. Ramesh Prakash, an energy economist, emphasized the significance of emerging economies in driving oil demand. “The growth trajectories of China and India are crucial for the global oil market. Their industrialization and urbanization trends will continue to push demand higher,” he said.

However, challenges remain. According to Sarah Mendez, a geopolitical analyst, “Supply-side disruptions, coupled with a transition to renewable energy in developed nations, could moderate oil demand growth in the long term. For oil-dependent economies like Nigeria, diversifying revenue streams will be essential.”

While OPEC’s forecast paints an optimistic picture of steady growth, uncertainties surrounding geopolitical tensions, energy transitions, and supply chain issues remain critical.

The global oil market is poised for a dynamic and challenging period, with opportunities for innovation and adaptation in the energy sector.

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