Oilprice said that according to recent forecasts, oil demand will continue to increase in 2025, China will direct the market and OPEC will likely cancel production cuts.
OPEC and the risk of losing market share
In November, some experts warned that OPEC might decide not to continue ceding market share and increase supply, despite falling oil prices. If OPEC completely scrapped the production curbs, oil prices could fall to $30-40 a barrel, said Tom Kloza of OPIS.
According to the International Energy Agency (IEA), OPEC's market share could fall from 34% today to 31% by 2028.
America: OPEC's biggest rival
The United States, the world’s largest producer of oil and natural gas, has dramatically increased production over the past two decades. However, some experts warn that the resource is finite, with easy-to-exploit oil and gas fields already depleted. This could lead to higher production costs in the future.
In addition, current oil prices are also a factor limiting production growth in the US.
China: The Decisive Factor
When it comes to oil demand, China remains the focus. China’s oil demand will continue to grow through 2025, but most of that growth will come from petrochemical feedstock, according to Wood Mackenzie. Meanwhile, demand for transportation fuels could decline.
Wood Mackenzie also said that global diesel demand will increase only slightly, due to China's switch to LNG. In addition, gasoline demand in China is expected to decrease due to the strong development of electric vehicles (EV).
Global demand forecast
According to the International Energy Agency (IEA), global oil demand will increase by 1.1 million barrels per day by 2025. Wood Mackenzie forecasts an increase of 1.4 million barrels per day, while ING estimates “less than 1 million barrels per day”.
All experts agree that supply will exceed demand, with China being the factor causing demand to decrease and non-OPEC countries being the factor causing supply to increase.
