The International Energy Agency (IEA) said Thursday that economic challenges and record electric vehicle (EV) sales will significantly slow global oil demand growth for the rest of 2025.
Global oil demand rose by 990,000 barrels per day (bpd) in the first quarter of 2025. But the IEA expects growth to slow to just 650,000 bpd for the remainder of the year, according to its May Oil Market Report.
For the full year, demand growth is forecasted to average 740,000 bpd, slightly higher than last month’s estimate of 730,000 bpd. That earlier projection had already been cut by 300,000 bpd from the IEA’s March forecast after U.S. tariff tensions increased in April.
The IEA predicts much slower growth in the coming quarters compared to the first three months of 2025. It also forecasts 2026 demand growth at about 760,000 bpd, close to the current year’s estimate.
Despite recent easing of U.S.-China trade tensions, the IEA said ongoing trade uncertainty will weigh on the global economy and reduce oil demand.
Signs of a demand slowdown are already appearing. After a strong first quarter, recent data from China and India has been weaker than expected, the agency noted.
The IEA also lowered its U.S. shale production forecast for the second month in a row, citing falling oil prices and plans by shale producers to cut capital spending and reduce rig counts.
OPEC followed suit on Wednesday by lowering its supply forecast for producers outside the OPEC+ alliance, including the U.S. Non-OPEC+ supply is now expected to rise by 800,000 bpd in 2025, down 100,000 bpd from last month’s estimate of 900,000 bpd.
- Russian Arctic LNG 2 Project Restarts Gas Processing
- Conflicting Gas Signals in the EU Threaten Supply Security
- Can Iraq’s Gas Projects Withstand Trump’s Iran Crackdown?