Global oil demand expected to slow down in Q4 2023

The International Energy Agency (IEA) in its current Oil Market Report preview says global crude oil demand for the fourth quarter of 2023, will slip to 101.7 million barrels per day.

According to the agency, crude oil demand growth is slowing down. It is expected to drop from a 2.8 million barrels per day (mb/d) increase in the third quarter of 2023 to 1.9 mb/d in the fourth quarter.

The global oil consumption growth forecast for the last three months of 2023 has been reduced by almost 400 thousand barrels per day (kb/d), mainly because of challenges in Europe, Russia, and the Middle East. Europe’s manufacturing and industrial sectors are particularly affected.

Factors contributing to this slowdown include higher interest rates affecting the real economy, and increased petrochemical activity focused on China rather than other regions, Consequently, the projected growth in world oil demand for 2023 has been adjusted downward by 90 kb/d to 2.3 mb/d from last month’s estimation. China is responsible for 78 per cent of this year’s rise.

According to the report, the main reason for this adjustment is the slower growth in crude oil demand than initially anticipated in Europe, Russia, and the Middle East.

The agency stated that the pace at which the oil demand is growing will decrease significantly, from an increase of 2.8 million b/d in the third quarter to 1.9 million b/d in the fourth quarter of this year.

“Looking ahead to 2024, oil consumption growth is expected to significantly slow down to 1.1 mb/d as the effects of COVID-related disruptions on demand start to normalize. In 2024 the slowdown will be clean energy-centered

Looking ahead to 2024, the IEA expects this crude oil demand slowdown to persist, with global demand growth halving to 1.1 million barrels per day.