The International Energy Agency (IEA) anticipates a marked increase in global oil demand through 2025, painting a bullish outlook for the energy sector despite uncertainties in the global economy. According to the IEA’s January Oil Market Report, worldwide oil demand is projected to grow from approximately 940,000 barrels per day (bpd) in 2024 to 1.05 million bpd in 2025. This acceleration is attributed to a resilient macroeconomic environment and growing consumption in developing economies.
On the supply side, OPEC+ nations have maintained relatively stable output, even as non-OPEC+ countries posted modest production gains. The IEA forecasts total global supply to reach around 104.7 million bpd by the end of 2025. Notably, the United States is expected to see its shale oil production plateau at roughly 9.05 million bpd through 2026, as producers emphasize financial discipline and capital returns over aggressive expansion.
African OPEC+ members are set to play a crucial role in maintaining global supply levels. Their increased output is projected to offset declines in other regions, underscoring their growing importance within the oil-exporting bloc. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) offered a similarly optimistic view, predicting a robust second half of 2025 for global GDP. This economic strength is expected to support steady oil demand despite ongoing geopolitical tensions and macroeconomic risks.
Market analysts and investors have responded positively to the IEA and OPEC reports. The alignment of rising global demand with constrained supply capabilities is perceived as a supportive factor for oil prices. Moreover, trade uncertainties and geopolitical instability—especially in key production and shipping regions—could further tighten the supply landscape, amplifying upward pressure on prices.
Overall, the juxtaposition of accelerating demand and tempered supply growth sets the stage for a potentially sustained period of higher oil prices. With U.S. production growth expected to remain flat and OPEC+ navigating output adjustments strategically, the oil market may enter 2025 with a tighter supply-demand balance than in previous years.
