OPEC has reduced its global oil demand forecasts for the next four years, citing a slowdown in Chinese growth, while simultaneously raising its long-term outlook due to increasing oil requirements in the developing world. The organization affirmed that there is no evidence to suggest that demand has peaked.
The OPEC+ coalition, which includes the Organization of the Petroleum Exporting Countries along with allies such as Russia, is increasing production to reclaim market share after years of cuts aimed at stabilizing prices. A decline in medium-term demand may complicate the group’s efforts to reverse its existing production cuts, which are set to remain in effect until the end of 2026.
According to OPEC’s 2025 World Oil Outlook released on Thursday, global demand is projected to average 105 million barrels per day this year. The organization anticipates demand will rise to an average of 106.3 million bpd in 2026 and then reach 111.6 million bpd by 2029. These forecasts for demand between 2026 and 2029 are all lower than estimates from the previous year. Specifically, the forecast for 2026 is reduced to 106.3 million bpd, down from 108 million bpd previously, while the 2029 estimate has been cut by 700,000 bpd compared to last year’s projection.
OPEC’s long-term demand outlook
In contrast, OPEC expects demand to continue growing for a more extended period compared to other forecasts, including those from BP and the International Energy Agency (IEA), which predict that oil consumption will peak within this decade.
“Oil underpins the global economy and is central to our daily lives,” stated OPEC Secretary General Haitham Al Ghais in the report’s foreword. “There is no peak oil demand on the horizon.”
OPEC indicated that demand has fully recovered from the COVID-19 pandemic, leading to a more stable outlook. Growth is also decelerating in China, a nation that has propelled oil usage in recent decades. “This comes on the back of slower economic growth, the faster penetration of EVs and related charging infrastructure, and continued oil substitution in several sectors,” OPEC noted regarding China.
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UAE committed to market stability
Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure, underscored the significance of the UAE’s role within the OPEC and OPEC+ frameworks. He reiterated the UAE’s commitment to all decisions made by OPEC+ that aim to ensure balance and stability in the global oil markets. In remarks made to the Emirates News Agency (WAM) during the 9th OPEC International Seminar in Vienna, Al Mazrouei highlighted that the UAE’s policy aligns with OPEC+ decisions and praised the wise leadership of the UAE for adopting a strategy aimed at enhancing the country’s production capacity.
He stated that this increased production capacity would be introduced into the market at the appropriate time as demand arises, emphasizing that such an expansion would serve as a stabilizing factor for both markets and oil prices. He expressed satisfaction with OPEC’s gradual market re-entry, noting that this return has not adversely affected price stability, which he believes indicates that OPEC and the OPEC+ group are well aware of market needs.
Al Mazrouei further projected that the group’s share would grow due to anticipated investments by member states such as the UAE, which has significantly invested in enhancing its production capabilities. He explained that the planned gradual production increases have positively contributed to maintaining balance and stabilizing prices at near-steady levels, with slight increases reflecting an uptick in global oil demand. He commended the essential role played by OPEC+ in sustaining the stability of the global oil market, stating: “We believe this alliance plays a significant role.” He also noted that relevant ministers and committees convene monthly to review and assess market demands, making collective decisions as a group rather than individually.
Contrasting IEA predictions
OPEC has maintained its forecast that demand in 2030 will average 113.3 million bpd, unchanged from last year. In contrast, the International Energy Agency anticipates that global demand will peak at 105.6 million bpd by 2029 and then decline slightly in 2030, according to the agency’s report released last month.
For the long term, OPEC sees India, the Middle East, and Africa as primary drivers of growth. Factors such as the U.S. withdrawal from the United Nations climate agreement and a slower rate of EV adoption in Europe are expected to have ripple effects on developing nations, which require more energy, according to OPEC.
OPEC predicts that global oil demand will reach 122.9 million barrels per day by 2050, an increase from the 120.1 million bpd projected in last year’s report. This forecast substantially exceeds other 2050 projections from the industry, such as those from BP. OPEC has been advocating for increased investment in the oil industry, stating that the sector requires $18.2 trillion in funding through 2050, compared to last year’s estimate of $17.4 trillion.
