World economic growth in 2025 is forecast at 2.8%, which points to an improving trend compared to this year’s expected level of 2.6%. Supporting this is an anticipated recovery in OECD economies from low growth in 2024. Non-OECD economies – including the key oil-consuming economies of China and India, along with other Asian developing economies – are set to continue their healthy growth levels and be responsible for a large part of next year’s global economic growth. This development is under the assumption that general inflation will continue retracting in 2024 and beyond. Hence, increasingly accommodative monetary policies are expected for 2H24 and 2025, assuming that key policy rates peak in 1H24. Although the output dynamic and growth contribution for the industrial sector in major OECD economies in 2023 was bearish, the dynamic is forecast to improve over the course of 2024 and 2025. While the services sector has been the main global economic growth driver for 2023, a normalization of the sector’s growth dynamic is expected in 2024 and 2025.
With this, global oil demand in 2025 is set to grow by a robust 1.8 mb/d, y-o-y, sustained by continued solid economic activity in China, and expected firm growth in other non-OECD countries. On a regional basis, OECD oil demand is forecast to expand by 0.1 mb/d, y-o-y, while non-OECD oil demand is expected to show a considerable growth of nearly 1.7 mb/d, mostly in China, the Middle East, and Other Asia, including India. In terms of oil products, transportation fuels are set to drive oil demand growth in 2025, with air travel expected to see further expansion, as both international and domestic traffic increase. Gasoline requirements will continue to see support from steadily rising road mobility in major consuming countries, such as China, the Middle East, India and the US. Both on-road diesel, including trucking, as well as healthy industrial, construction and agricultural activities in non-OECD countries are expected to support diesel demand. Light distillates are projected to be supported by capacity additions, and petrochemical margins, mostly in China and the Middle East.
Non-OPEC oil supply in 2025 is forecast to grow by 1.3 mb/d, y-o-y, supported by expected healthy demand and upstream investment. Oil and gas upstream CAPEX investment in non-OPEC countries is expected at around $473 billion. This is slightly lower than anticipated spending in 2024. Growth in 2025 is primarily set to come from OECD Americas, with US liquids production forecast to expand by 0.6 mb/d, mainly from Permian crude, non-conventional NGLs and the Gulf of Mexico. Other main growth drivers are forecast to be Brazil, Canada, Norway, Kazakhstan and Guyana, with new field start-ups, ramp-ups or the optimization of existing projects
Bringing forward the publication of the 2025 forecast to the January 2024 MOMR issue is part of the continued commitment of the OPEC organization to offer more transparency and support for both consumers and producers. The undertaking to reach beyond the previously established time horizon of short-term forecasting serves to support the understanding of market dynamics and to support the continued commitment of the OPEC and non-OPEC Participating Countries in the Declaration of Cooperation (DoC) to achieve and sustain a stable oil market, and to provide long-term guidance for the market, and in line with the successful approach of being precautious, proactive, and pre-emptive, which has been consistently adopted by OPEC and non-OPEC Participating Countries in the DoC.
Source: OPEC