Rise in oil demand slows due to decline in Chinese consumption

The growth of global oil demand will slow to just under one million barrels per day (bpd) this year and next, according to the International Energy Agency (IEA), as Chinese consumption contracted in the second quarter due to economic problems.

Global demand increased by 710,000 bpd in the second quarter, the smallest quarterly increase in more than a year, according to the IEA's monthly oil report.

"China's preeminence is fading. Last year, the country accounted for 70% of global demand increases, a figure that will drop to around 40% in 2024 and 2025," noted the IEA.

The IEA's forecast of relatively low oil demand growth, at 970,000 bpd this year, remained virtually unchanged from its forecast last month. Next year, an increase of 980,000 bpd is expected.

The IEA added that as the global economic recovery from the COVID-19 pandemic stabilizes, weak economic growth, increased energy efficiency, and the rise of electric vehicles will act as headwinds to growth this year and next.