The International Energy Agency reduced its prediction for 2024 oil demand growth, citing “exceptionally weak” OECD deliveries, a largely complete post-Covid-19 rebound and a rising electric vehicle fleet, according to CNBC.
In its most recent monthly oil market report, the IEA reduced its 2024 oil demand growth forecast by around 100,000 barrels per day (bpd) to 1.2 million bpd.
The global energy watchdog said it expected that the pace of expansion will slow even more to 1.1 million bpd next year, “as the post-Covid 19 rebound has run its course.”
The IEA’s assessment comes as oil prices have rebounded due to rising Middle East tensions, with energy market participants closely monitoring the possibility of supply interruptions from the oil-producing area.
Iran, a member of the Organization of Petroleum Exporting Countries, has pledged to retaliate after accusing Israel of attacking its embassy in Damascus earlier this month.
The incident has heightened tensions in an area already dealing with the ongoing Israel-Hamas conflict. Israel has not claimed responsibility for the attack.
According to a US official, the US expects Iran to launch an attack on Israel, but it will not be large enough to draw Washington into war. Iranian sources say Tehran has signaled a reaction aimed at avoiding a serious escalation, according to Reuters.
International benchmark Brent crude futures with June delivery traded 0.8% higher at $90.42 per barrel on Friday morning in London, while U.S. West Texas Intermediate futures with May delivery rose 0.9% to trade at $85.76 per barrel.
“Escalating oil supply security concerns are set against a backdrop of solid global oil demand growth of 1.6 mb/d in the first quarter and a more upbeat outlook for the global economy,” the International Energy Agency (IEA) stated in its report.
“World oil demand growth has nevertheless been revised down by roughly 100 kb/d since last month’s Report, to 1.2 mb/d, following exceptionally weak deliveries in the OECD at the start of the year,” the energy agency added.