IEA Forecasts Slowing Oil Demand Growth Due to Economic Headwinds and Record EV Sales
The International Energy Agency (IEA) has predicted a significant slowdown in global oil demand growth for the remainder of 2025, citing economic headwinds and the surge in electric vehicle (EV) sales. In the first quarter of the year, world demand saw a rise of 990,000 barrels per day (bpd), but the IEA anticipates growth to drop to just 650,000 bpd for the rest of the year.
The agency’s latest Oil Market Report for May reveals that concerns about economic growth and the record sales of EVs are expected to impact global oil demand growth throughout 2025. The IEA forecasts an average demand growth of 740,000 bpd for the full year, slightly higher than the previous estimate of 730,000 bpd growth.
Despite the recent U.S.-China trade developments, the IEA remains cautious, stating that increased trade uncertainty could weigh on the world economy and, consequently, oil demand. Signs of a slowdown in global oil demand growth are already evident, particularly in China and India, according to the agency.
Additionally, the decline in oil prices and indications of reduced capital spending in the U.S. shale industry have led the IEA to lower its forecast for U.S. shale production for the second consecutive month. OPEC has also revised its forecast for liquids supply from non-OPEC+ producers, with supply expected to increase by 800,000 bpd in 2025.
In conclusion, the global oil market is facing challenges due to economic uncertainties and the rapid growth of EVs. Investors and consumers should monitor these developments closely as they could have significant implications for oil prices and the overall energy landscape in the coming months.