The International Energy Agency (IEA) has issued a warning about the declining global oil inventories, despite the ongoing slowdown in global demand for crude oil, which is expected to reach new record levels in 2024. According to the IEA’s monthly oil report, oil inventories observed a decrease of approximately 60 million barrels in January, with onshore stocks dropping to their lowest since at least 2016.
In December, global stocks saw an increase of 21.6 million barrels, driven by a rise in offshore oil stock compensating for a decrease in onshore inventories (-39 million barrels), amidst disruptions in maritime traffic in the Black Sea.
The IEA, established 50 years ago by the Organisation for Economic Co-operation and Development (OECD) to assist wealthy nations during the oil crisis, emphasized the ongoing importance of oil supply security. The Paris-based agency cautioned that the reduction in oil stocks could limit the industry’s ability to respond to unexpected demand or supply disruptions.
Amidst the tumultuous market conditions, the IEA also anticipates that the slowdown in oil demand growth will accelerate in 2024 due to economic challenges and advances in energy transition, including the increase in electric vehicles worldwide. Global oil demand growth is expected to average 1.2 million barrels per day, half of the sharp increase experienced last year (2.3 million barrels per day).
China, India, and Brazil are projected to account for over two-thirds (78%) of the global oil demand growth in 2024, reaching a new record level of 103 million barrels per day.
The IEA suggests that the expansive phase of global oil demand growth post-pandemic has largely reached its conclusion.
