The global economy has outperformed expectations so far in 1H25, with data indicating better-thanexpected growth in India, China and Brazil in 1Q25. In the US, underlying growth remained solid, while the Eurozone experienced a modest rebound from last year. This strong base from 1H25 is anticipated to provide support and sufficient momentum into a sound 2H25. However, the growth trend is expected to moderate slightly on a quarterly basis.
With these dynamics, global economic growth is forecast at 2.9% in 2025.
By 2H25, partial trade deals between the US and key partners are expected to be reached and thus reduce uncertainty. As trade patterns partially normalise, trade-related distortions in growth trends are expected to ease, with consumption and investment projected to remain firm. Nonetheless, some risks may persist on the tariff front, particularly given the scheduled expiration of the 90-day pause on reciprocal tariffs in July and August, including those targeting China. It should be noted that the acceleration of measures, such as consumptionboosting policies in China and fiscal support in Germany and the US, is expected to offset some of the potential drag from ongoing trade uncertainty. Further support may come from accommodative monetary policies in the US, the Eurozone and China.
The US Federal Reserve (Fed) is expected to continue easing in 2H25, after having held interest rates steady over its past three meetings. Moreover, both the European Central Bank (ECB) and the People’s Bank of China (PBoC) are projected to extend their accommodative stance into 2H25. With this, global oil demand is forecast to grow by an average of 1.4 mb/d, y-o-y, in 2H25. For the full year 2025, it is forecast to expand by 1.3 mb/d. In the OECD, oil demand is estimated to increase by 90 tb/d, y-o-y, in 2H25. This is driven mostly by the US. In terms of products, jet kerosene and gasoline are set to be the main regional oil demand drivers, on the back of the summer driving season and continued healthy air travel activity. Diesel requirements, however, are anticipated to be subdued by softer economic and manufacturing activity, and demand for naphtha may be pressured by declining petrochemical margins. Overall, OECD oil demand is projected to average 160 tb/d in 2025.
In the non-OECD, Other Asia is expected to be the primary oil demand driver, with China and India providing substantial support. Oil demand is seen as underpinned by ongoing air travel recovery, healthy driving levels, as well as improvements in manufacturing sector activities. Non-OECD oil demand is forecast to grow on average by 1.3 mb/d, y-o-y, in 2H25. In terms of the main products, gasoline and jet fuel are set to lead regional oil demand growth, followed by diesel, LPG and naphtha.
Overall, non-OECD oil demand is projected to average 1.1 mb/d in 2025. Following y-o-y estimated growth of 1.2 mb/d in 1H25, non-DoC liquids supply is forecast to expand by 0.5 mb/d, y-o-y, in 2H25. As a result, non-DoC liquids supply in 2025 is anticipated to grow by 0.8 mb/d, y-o-y. On a regional basis, OECD liquids supply (excluding Mexico) is projected to rise by 0.2 mb/d, y-o-y, in 2H25, driven by the US, Norway and Canada. Liquids supply from the non-OECD region (excluding DoC participating countries) is forecast to increase by 0.3 mb/d, y-o-y, in 2H25. Latin America is expected to lead non-OECD production growth, contributing an increase of 0.3 mb/d, y-o-y, in 2H25, while supply output in Africa and Other Asia is projected to experience the largest declines.
Source: OPEC