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Asia Pacific to drive 63% of global oil demand growth in 2024

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By Colin Hay - 
Asia Pacific APAC oil demand 2024 Wood Mackenzie

A new report has named key markets in the Asia Pacific (APAC) region as being the main driver for 1.9 million barrels a day (bpd) of growth in global oil demand in 2024.

Speaking at International Energy Week in London, Wood Mackenzie’s vice president of oils research Alan Gelder said APAC will account for more than 63% of the total growth.

Gelder said APAC countries, excluding China and India, would account for 542,000 bpd of the increased demand with China accounting for 496,000 bpd and India 161,000 bpd.

He noted that the strong APAC growth was significantly different to what is occurring in Europe, where demand is projected to decline by 44,000 bpd due to weak economic growth.

“Asia more broadly will play a vital role in the global markets in 2024,” Mr Gelder said. “Global economic growth is still not back to historical levels and this is being played out in Europe.”

2025 oil growth slows

He added that the Wood Mackenzie forecast for oil growth in 2025 would be lower at 1.4 million bpd with APAC again being the major driver accounting for over 59% of the total.

Mr Gelder also said that in terms of oil production, members of the Organisation of Petroleum Exporting Countries (OPEC) can expect to be called upon to increase volumes to balance the market in 2024 despite the OPEC+ decision in November 2023 to implement a voluntary 2.2mbpd cut for Q1 2024.

“This production restraint will support oil prices and the Wood Mackenzie forecast for 2024 for the Brent average is $85.90 [per barrel],” Mr Gelder said.

“We forecast Saudi Arabia’s production to average 9mbpd in Q1 2024 and 9.25mbpd in Q2 2024 as we assume Q1 production restraint continues through Q2.”

Red Sea an issue

Mr Gelder added that Red Sea disruption caused by the continued attacks on vessels has led to middle distillate products such as diesel, gas oil and jet fuel being diverted around the Cape of Africa.

This is supporting demand for bunker fuel.

“Jet cargoes have seen the biggest impact with over 60% of volumes diverting to the Cape as opposed to 45% of diesel and gas oil,” he said.

“This led to European jet fuel crack spreads spiking higher by over US$6 per barrel for February, just under twice the increase witnessed by diesel.”