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on thursday local time, the international energy agency (iea) pointed out in its monthly report that global oil demand growth is "slowing sharply", reinforcing expectations that demand will peak before 2030. oil prices have fallen to their lowest level in nearly three years.

specifically, the iea pointed out in its monthly report that the global oil demand growth rate will reach 903,000 barrels per day in 2024, lower than the 970,000 barrels per day predicted last month; the oil demand growth rate in 2025 is expected to remain unchanged at 950,000 barrels per day. it is also expected that the global average daily oil demand will be 103 million barrels and 103.9 million barrels in the next two years respectively.

the iea has lowered its forecast several times this year, which is much lower than opec's forecast level, but its forecast for global demand trends is consistent with opec. this week, opec's monthly report showed that global oil demand is expected to grow by 2.03 million barrels per day this year and 1.74 million barrels per day next year, compared with last month's forecasts of 2.11 million barrels per day and 1.78 million barrels per day, respectively.

the iea monthly report also showed that global oil consumption increased by 800,000 barrels per day in the first half of this year, only one-third of the increase in the same period in 2023, the lowest level since the collapse of oil demand during the epidemic in 2020.

the sluggish demand comes as consumption in some major economies falls short of expectations and the rising market share of electric vehicles also weighs on gasoline consumption. the slowdown in consumption is most evident in industrial products such as naphtha and gasoline.

the iea report follows a sharp pullback in oil prices in recent days amid growing concerns about global demand and the prospect of an oversupplied market next year.

weaker oil prices prompted opec and its allies to postpone a planned production increase by two months, but the move was not enough to reverse the decline in oil prices. brent crude was around $71.3 a barrel in european trading on thursday, while west texas intermediate, the u.s. oil benchmark, was around $68 a barrel.

opec+ is currently implementing a production cut agreement of approximately 2.2 million barrels per day. the alliance originally planned to relax voluntary production cuts from october, but postponed the production increase to december last week.

market watchers say opec+ could lose more market share if it continues to cut production, but oil prices will weaken further if it does not take long-term action to address the global glut.

the iea pointed out that the outlook for the oil market next year is even weaker, and even if opec+ abandons plans to increase production, there will still be oversupply every quarter.

also weighing on prices, the iea expects non-opec+ production to rise by 1.5 million bpd next year as supply surges from the united states, guyana and brazil.

iea executive director fatih birol said the iea expects global oil demand to peak before 2030, and current trends reaffirm the agency's expectation that "the peak may be imminent."