Global Oil Consumption Growth to Weaken Amid Economic Slowdown: EIA

Crude oil and other liquids fuel consumption growth are expected to weaken over the next two years, in line with a slowdown in economic growth, most notably in Asia, according to a May 15 report published by the U.S. Energy Information Administration. Oil consumption is still expected to grow, albeit at a slower rate. The agency forecast it to grow by less than 1 million barrels per day (b/d) in 2025 and 2026, which marks three consecutive years of growth under that level, and 0.3 million b/d lower than the average over the last 20 years before the Covid 19  pandemic.

The agency forecasts GDP to increase by 2.8 percent during 2025 and 2026, the lowest economic rates since 2008, excluding the economic downturn during 2009 and 2020. Lower GDP forecasts can be attributed to uncertainty over global manufacturing, investment and world trade, which will all impact economic growth and in turn oil consumption.

Yearly oil consumption growth has been the lowest during the years when the global economy grew by less than three percent, since 2020. Based on preliminary projections, global oil consumption was approximately 103 million b/d last year. Tariffs announced on U.S. trading associates last month are expected to impact oil consumption growth, since less global trade will lead to fewer shipments of goods on ships and fewer trucking deliveries.

Global oil consumption expectations are expected to impact Brent crude oil prices. The agency forecasts Brent crude oil prices to decline from an average of $81 per barrel (b) during 2024 to $74/b in 2025 and $66/b in 2026. The agency’s price decline expectations can be attributed to slower demand growth and robust global growth in production of petroleum and other liquids.

The agency in its January short term energy outlook projected Asian oil consumption growth to average 0.7 million b/d over 2025 and 2026. In its latest outlook, consumption growth has declined to average 0.5 million b/d over the period.