Global oil demand is projected to slow this year, with a record rise in electric vehicle sales an influencing factor, the International Energy Agency (IEA) has said.
According to the May 2025 Oil Market Report by the International Energy Agency (IEA), global oil demand is expected to decline from 990,000 barrels per day (kb/d) in the first quarter of 2025 to an expected 650 kb/d for the rest of the year.
‘Signs of a slowdown in global oil demand growth may already be emerging and will be tracked closely,’ the IEA said in its report.
As well as EV sales, economic headwinds are affecting global oil demand, the IEA noted. OECD countries are expected to see accelerating declines in oil demand, while emerging economies continue to drive growth.
Supply increase
Global oil supply is expected to increase, however, with supply expected to grow by 1.6 million barrels per day (mb/d) to 104.6 mb/d in 2025 and by another 970 kb/d the following year.
Crude oil prices have been volatile, the data showed, with benchmark prices dropping by around $10 per barrel in April and early May due to trade tensions and unexpected OPEC+ supply increases
‘Bearish sentiment’
‘Oil prices resumed their downward trajectory in late April and early May as trade tensions impacted financial and commodity markets and OPEC+ agreed to a further unwinding of production cuts,’ the IEA said in its report. ‘Bearish sentiment subsequently eased somewhat after the United States reached a trade deal with the United Kingdom on 8 May, and a 90-day accord with China on 12 May.
‘Nonetheless, increased trade uncertainty is expected to weigh on the world economy and, by extension, oil demand.’ Read more here.
Read more: Global EV sales set to account for more than a quarter of total cars sold this year
