Market Speaks: World oil demand growth forecast to increase by 700 kb/d in 2025 - its lowest rate since 2009

International Energy Agency or IEA stated in a latest monthly update that world oil demand growth is forecast to increase by 700 kb/d in 2025, its lowest rate since 2009, with the exception of the 2020 Covid year. Annual growth eased from 1.1 mb/d in 1Q25 to just 550 kb/d in 2Q25, with emerging market consumption particularly lacklustre. Global oil demand is projected to expand by 720 kb/d to reach 104.4 mb/d in 2026.

Global oil supply increased by a steep 950 kb/d m-o-m to 105.6 mb/d in June, led by Saudi Arabia. Output was up by 2.9 mb/d y-o-y, of which OPEC+ accounted for 1.9 mb/d. With higher OPEC+ targets for August, world oil supply is projected to rise by 2.1 mb/d to 105.1 mb/d this year and by an additional 1.3 mb/d in 2026, with non-OPEC+ adding 1.4 mb/d and 940 kb/d, respectively.

Following a 1.7 mb/d monthly increase in June, global refinery runs are set to rise by a further 2 mb/d over July and August, to reach a seasonal peak of 85.4 mb/d. Runs will increase by 500 kb/d in 2025 and 460 kb/d in 2026, to an average 83.3 mb/d and 83.8 mb/d, respectively. Refining margins eased in June, as crude prices rallied but subsequently recovered to multi-month highs in early July, led higher by stronger diesel cracks.

Observed oil inventories surged by 73.9 mb to 7 818 mb in May, led by OECD commercial product inventories and crude in non-OECD countries. Crude, NGLs and feedstocks were up for the fourth month in a row, by 49.7 mb, in large part due to a sharp rise in China, while oil products increased for the first time this year, by 24.2 mb. Preliminary data for June showed global oil stocks rose further, mainly in oil on water and the non-OECD.

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