Global oil demand is expected to grow by over 1 million b/d in 2025, up from 830,000 b/d in 2024, reaching a total of 103.9 million b/d, according to the latest Monthly Oil Market Report released by the International Energy Agency (IEA) in March 2025.
Asia is set to drive nearly 60% of this increase, led by China, where demand for petrochemical feedstocks is expected to account for the entirety of the country’s growth as demand for refined fuels reaches a plateau.
However, the outlook remains clouded by economic uncertainty, IEA said. Recent delivery data have fallen short of expectations, leading to downward adjustments for oil demand growth in fourth-quarter 2024 and first-quarter 2025, leading to slightly lower estimates for fourth-quarter 2024 and first-quarter 2025 growth at 1.2 million b/d year-over-year.
“The macroeconomic conditions that underpin our oil demand projections deteriorated over the past month as trade tensions escalated between the US and several other countries. New US tariffs, combined with escalating retaliatory measures, tilted macro risks to the downside,” IEA said.
Oil production trends
World oil supply rose by 240,000 b/d in February, reaching 103.3 million b/d. The increase was driven by higher output from OPEC+ members, particularly Kazakhstan, which produced at record levels as output from Tengiz field ramped up. Iran and Venezuela also increased production ahead of anticipated tighter sanctions.
Non-OPEC+ production is forecast to rise by 1.5 million b/d in 2025, led by producers in the Americas. OPEC+ output, which declined by 770,000 b/d last year, could hold steady in 2025 if voluntary production cuts are maintained beyond April, according to IEA.
“The US is currently producing at record highs and is forecast to be the largest source of supply growth in 2025, followed by Canada, Brazil, and Guyana. Proposed US tariffs on Canada and Mexico, set to take effect on 1 April, may impact flows and prices from the two countries that accounted for roughly 70% of US crude oil imports last year. Meanwhile, the latest round of sanctions on Russia and Iran has yet to significantly disrupt loadings, even as some buyers have scaled back purchases,” IEA said.
Crude refining, stock levels
Global crude refining activity fell by 570,000 b/d month-on-month in February to 82.8 million b/d, continuing a decline from December’s 5-year high of 84.3 million b/d. The drop was attributed to both planned and unplanned outages. Refining throughputs are projected to average 83.3 million b/d in 2025, up 570,000 b/d from 2024, with lower OECD refining activity partially offset by a 930,000 b/d increase in non-OECD regions.
Refining margins rebounded in February as falling crude prices improved profitability across all regions.
Global oil stocks fell by 40.5 million bbl in January, with product stocks accounting for 26.1 million bbl of the decline. Non-OECD crude stocks fell sharply by 45.3 million bbl, driven by a drop in Chinese imports. In contrast, total OECD stocks rose by 11.2 million bbl, boosted by a 25 million bbl build in industry crude inventories. Oil held on water declined by 6.7 million bbl. Preliminary data for February, however, suggest a rebound in global oil stocks, supported by increased oil on water.
Oil prices dropped by about $7/bbl in February and early March as weakening macroeconomic sentiment and escalating trade tensions weighed on the market outlook. Plans by OPEC+ to begin easing voluntary production cuts in April have reinforced expectations of a well-supplied market in 2025.