OPEC Vs. IEA: Who To Believe On Oil Demand Forecasts?

Haitham al-Ghais, Secretary General of OPEC, speaks with Carlos Pascual during CERAWeek by S&P Global in Houston, Texas on March 7, 2023. (Photo by Mark Felix / AFP) (Photo by MARK FELIX/AFP via Getty Images)

Oil prices firmed up slightly Thursday in the wake of the latest upward revision of 2024 crude demand growth by the International Energy Agency (IEA). The international Brent benchmark price was up by half a percent after IEA raised its growth estimate by 180,000 barrels per day (bpd) over the previous estimate of 1.1 million bpd announced December 16.

That December estimate, released within 48 hours of the conclusion of the COP28 conference in Dubai, represented a rise of 130,000 bpd over the agency’s original, low-ball estimate, which was issued as part of a report predicting that global crude oil demand would peak by 2030. The IEA has made something of a ritual in recent years of producing a low initial estimate for oil demand growth, and then following it up with a series of upwards revisions over the ensuing 12 months as demand remains stronger than it had expected. The agency has missed its initial estimate on the low side in 10 of the past 12 years and looks to be likely to make it 11 of 13 years during 2024.

By contrast, the OPEC cartel of large crude exporting nations held firm on its demand growth estimate of 2.25 million bpd for 2024, also projecting strong demand growth for 2025 and beyond. The cartel’s Secretary General, Haitham Al Ghais, also slammed early projections of peak oil demand as being “misguided.”

“Ultimately, peak oil supply has never come to pass, and predictions of peak oil demand are following a similar trend,” Al Ghais said in a statement titled “A History of Unrealized Peaks,” published at the OPEC website. “Peak oil demand is not showing up in any reliable and robust short- and medium-term forecasts.”