Weaker Global Economic Outlook
Major economic forecasters have cut their outlooks for world GDP growth in 2025 by roughly half a percentage point to around 2.8% and see a below-trend pace of about 3% annually for the remainder of the decade.
OPEC+, led by Saudi Arabia, has decided to start easing oil production limits in May 2025, which is changing the expected path of oil supply from 2024 to 2030.
The anticipated output increase from OPEC+ and the impact of higher tariffs on trade pushed oil prices to four-year lows in April and early May.
A Decade Defined by U.S. Supply and Chinese Demand
Over the past decade, oil market dynamics have been defined by the parallel growth in US oil supply and Chinese oil demand.
From 2015 to 2024, the United States accounted for 90% of the increase in global supply, with the shale boom lifting US oil production by more than 8 mb/d to over 20 mb/d. At the same time, Chinese oil demand rose by nearly 6 mb/d, accounting for 60% of the global increase in oil use. The picture to 2030 looks very different.
Shifting Trends in China and the U.S.
Chinese oil demand is on track to peak this decade. For supply, the pace of expansion in US oil production is slowing as oil companies scale back investments but it nevertheless remains the largest contributor to non-OPEC+ growth in the forecast.
Slowing Global Oil Demand Growth
Global oil demand is forecast to rise by 2.5 mb/d from 2024 to 2030, reaching a plateau around 105.5 mb/d by the end of the decade.
However, annual growth slows from roughly 700 kb/d in 2025 and 2026 to just a trickle over the next several years, with a small decline expected in 2030, based on today’s policy settings and market trends. This is driven by below-trend economic growth, weighed down by global trade tensions and fiscal imbalances, and the accelerating substitution away from oil in the transport and power generation sectors.
Impact of EVs and Power Sector Transition
EVs are set to displace 5.4 mb/d of global oil demand by the end of the decade. Substitution away from oil will also feature prominently in power generation during the forecast period – particularly in Saudi Arabia, where displacement of oil burning by natural gas and renewables drives the single largest decline in oil demand for any country through 2030.
Petrochemicals Take the Lead in Oil Demand
Globally, the production of polymers and synthetic fibres will require 18.4 mb/d of oil by 2030, or more than one in every six barrels. Demand for oil from combustible fossil fuels – which excludes petrochemical feedstocks and biofuels – may peak as early as 2027.
The petrochemical industry is set to become the dominant source of global oil demand growth from 2026 onwards.
Emerging Markets Drive Demand Growth
Robust oil demand growth of 4.2 mb/d in emerging and developing economies over the 2024-30 period contrasts with a continued contraction in advanced economies.
Asian markets dominate growth, with India’s expected 1 mb/d increase the largest of any single country by far, though rising oil use in Southeast Asian economies is also significant. By contrast, oil consumption among OECD countries is forecast to decline by 1.7 mb/d through 2030.
Revised Outlooks for China and the U.S.
While the overall picture for global oil demand is broadly unchanged from last year’s forecast, this masks notable changes among the world’s two largest consumers. China’s total oil consumption in 2030 is now set to be only marginally higher than in 2024, compared with growth of around 1 mb/d forecast previously.
By contrast, lower gasoline prices and a loss of momentum in EV adoption in the United States, the world’s largest oil consumer, have led to an increase in forecast oil demand of 1.1 mb/d by 2030 compared with last year’s report.
Oil Supply Growth Outpaces Demand
World oil production capacity is forecast to rise by 5.1 mb/d to 114.7 mb/d by 2030, led by Saudi Arabia and the United States – significantly outpacing the projected 2.5 mb/d increase in global oil demand. Mirroring demand trends, supply capacity growth is heavily frontloaded, slipping from 1.8 mb/d in 2025 to contraction after 2029 as the pipeline of non-OPEC+ projects wanes.
Key Contributors to Supply Growth
Global NGL output is set to rise by 2.3 mb/d to 20.1 mb/d by 2030, making up nearly half of the total oil supply growth. The Middle East will add 1.4 mb/d, and U.S. shale gas will boost output by 860 kb/d. Biofuels from Brazil, India, and Indonesia will contribute 680 kb/d. Crude capacity will grow by 1.8 mb/d, led by the UAE and Iraq, while Mexico sees the largest decline.
Refining Faces Structural Challenges
Refined product demand is set to peak at 86.3 mb/d in 2027—just 710 kb/d above 2024—driven mainly by petrochemical growth reliant on NGLs. Post-2027, falling gasoline and diesel use will outweigh gains in naphtha and jet fuel, challenging the refining sector.
Despite weak demand growth, global refining capacity is set to grow by a net 2.6 mb/d by 2030, driven by Asia, especially China and India. This exceeds demand needs, suggesting further shutdowns—mainly at high-cost plants in Europe and the US West Coast.
https://www.iea.org/reports/oil-2025/executive-summary
https://iea.blob.core.windows.net/assets/c0087308-f434-4284-b5bb-bfaf745c81c3/Oil2025.pdf