IEA says oil demand growth weakness to continue on China and EVs

GLOBAL oil demand growth will continue to weaken due to China’s economic slowdown and the rapid uptake of electric vehicles, according to the International Energy Agency (IEA).

“This year, global oil demand is very weak, much weaker than previous years, and we expect this will continue because of one word – China,” Fatih Birol, the executive director of the IEA, said in an interview with Bloomberg television on Monday (Oct 21). He reiterated that crude supply and spare capacity was ample.

Oil is lower this year, but an escalation of hostilities in the Middle East has put the market on edge, with traders watching for Israel’s response to Iran’s recent missile barrage. Birol said prices are vulnerable to “some spikes” due to the tensions, though there will be no problems with “the availability of oil.”

Swelling American production is set to create an oil glut in early 2025, while spare capacity in the Opec+ alliance was near record levels, the IEA said in a report last week. The Paris-based agency added that Chinese oil consumption was down 500,000 barrels a day in August, compared with a year ago.

Saudi Aramco, however, is bullish on China’s oil demand after the government introduced a raft of stimulus measures to revive the economy, its chief executive officer Amin H Nasser, said in Singapore on Monday. BLOOMBERG