Global oil consumption continued its upward trajectory in the second quarter of 2024, albeit at a slower pace compared to the previous year.
The International Energy Agency (IEA) attributes this primarily to a slowdown in construction and industrial activity in China, as highlighted in its monthly report.
Forecast for Global Oil Demand
“Global demand is expected to grow by less than 1 million barrels per day in both 2024 and 2025,” the IEA predicts, indicating a growth rate below the pre-pandemic trend.
The IEA has maintained its July forecasts largely unchanged.
For the full year 2024, the IEA anticipates global consumption to reach 103.06 million barrels per day (mb/d), compared to 102.09 mb/d in 2023 and 100.6 mb/d in 2019.
Regional Consumption Trends
On a continental level, Europe stands out as the sole region where oil product consumption is projected to decline in 2024. The IEA forecasts consumption to reach 14.1 mb/d, down from 14.25 mb/d last year and 15.1 mb/d in 2019, before the pandemic.
In contrast, the Americas are expected to consume 31.5 mb/d, slightly up from 31.4 mb/d in 2023. The Asia-Pacific region is projected to see an increase in consumption to 38.9 mb/d in 2024, compared to 38.1 mb/d in 2023.
China’s Consumption Slowdown
While China’s overall consumption is expected to continue rising in 2024 (to 16.8 mb/d from 16.5 mb/d in 2023 and 14.1 mb/d in 2019), the IEA notes a slowdown in June for diesel and naphtha, “products associated with industry and construction.”
Shift Towards Alternative Fuels in China
China’s diesel market is being impacted by the growing share of heavy-duty vehicles running on liquefied natural gas or electricity (batteries), the IEA observes.
“Sales of these vehicles have been stronger in China than in all other economies, gradually eroding diesel use,” the report highlights, adding that these new types of engines will have helped avoid 500,000 barrels of oil per day in 2024.
“According to the China Automotive Industry Data Center, about 40% of heavy-duty vehicles produced in China in the first half of the year ran on natural gas and 6% on batteries,” the report notes.
Structural Changes and Electric Vehicle Growth
“These structural changes are adding pressure on global oil consumption,” the report states, also noting that electric car sales in China have progressed significantly in the first half of the year, reaching a market share of “over 50% in July,” according to the China Association of Automobile Manufacturers.
Consumption in Other Regions
In the rest of the world, oil consumption in Africa is expected to reach 4.4 mb/d this year, up from 4.3 mb/d last year. In the Middle East, consumption is projected to increase to 9.09 mb/d from 9.05 mb/d in 2023.