OPEC predicts decline in demand, driven by China’s slowdown

The world’s oil producers are bracing for a decline in global demand next year and lower-than-expected sales through 2029 amid a slowdown in China’s economic growth and its expanded use of alternative fuels.

The forecast is contained in OPEC’s 2025 World Oil Outlook, which was published today in connection with the organization’s biennial International Seminar taking place in Vienna, Austria.

In the long run, however, OPEC sees demand rising again in 2030 as consumption grows in India, the Middle East and Africa. Among the factors for the predicted rebound are expectations that many countries will miss their climate goals for transitioning to sustainable fuels.

World oil demand in 2026 will average 106.3 million barrels per day, down from 108 million bpd last year, OPEC said in the report. It expects demand to grow steadily to 111.6 million bpd in 2029, which is below previous forecasts.

Behind the expected cut in demand is the economic slowdown in China, which is the world’s biggest oil importer. Other factors cited were China’s embrace of electric vehicles and their charging infrastructure along with increased use of solar power and other sustainable energy sources.

Amid the expectations for next year’s decline in oil demand, the OPEC+ group – which comprises both OPEC members and other producers including Russia – announced on Saturday that it will further lift mandated supply limits in August to regain market share after years of cuts.

OPEC Secretary General Haitham Al-Ghais said today that the group sees signs of strong demand during the current year, driven by China and India as well as a “booming” aviation season and an uptick in U.S. gasoline demand. In an interview with CNBC he cited the importance of uninterrupted oil supply around the world, warning that conflicts in the Middle East and U.S. sanctions threaten to undermine that.

OPEC sees growth in fossil fuel demand for the next 20 years

Amid global efforts to move away from fossil fuels, the world’s biggest oil producers see continued growth in demand for at least the next 20 years.

OPEC Secretary General Hathaim Al Ghais offered a peek at the bloc’s long-term forecast in a response to the International Energy Agency’s report on Wednesday that projects oil demand peaking by 2029 and leveling off at around 106 million barrels per day towards the end of the decade, Reuters reports.

The OPEC chief, writing in Energy Aspects, called the IEA report “dangerous commentary, especially for consumers, [that] will only lead to energy volatility on a potentially unprecedented scale.”

Al Ghais said similar narratives had been proven wrong previously, such as the IEA suggesting gasoline demand had peaked in 2019 or that coal demand had peaked in 2014.