LONDON, May 15 (Reuters): Global oil demand will rise more slowly for the remainder of 2025 due to economic headwinds combined with record sales of electric vehicles, the International Energy Agency (IEA) said on Thursday, as rising supply from planned OPEC+ output hikes keeps the market in surplus.
Lower oil prices stemming from trade tensions and rising output are impacting US shale output growth, while also curbing Russian oil revenue, the IEA, which advises industrialised countries, said in its monthly oil market report.
The IEA raised its 2025 demand growth forecast by 20,000 barrels per day (bpd) to 740,000 bpd in its May report, with growth slowing to 650,000 bpd for the rest of this year, from 990,000 bpd in the first quarter.
"Signs of a slowdown in global oil demand growth may already be emerging," the IEA said, adding that deliveries to China and India had been weaker than expected after relatively robust imports in the first quarter.
Total oil demand will average 103.90 million bpd this year, the IEA said, an upward revision from 103.54 million bpd last month, citing updates to historical demand estimates for some countries including Egypt and Nigeria, in addition to the 20,000 bpd hike in its demand growth forecast.
Meanwhile, the IEA hiked its 2025 supply growth forecast by 380,000 bpd to 1.6 million bpd, on the expectation of higher output from Saudi Arabia.
Saudi Arabia is the only country with room to add barrels back to the market based on current production levels, the IEA said, after the OPEC+ group agreed a second monthly accelerated output increase for June at its last meeting.
The oil market surplus could see global oil storage levels rise by around 720,000 bpd this year, the IEA said, after stocks declined on average by 140,000 bpd last year.
As a result of changes, the IEA's latest forecasts imply a slightly larger surplus in 2025 from last month's 710,000 bpd.
Next year, the IEA sees demand growth averaging 760,000 bpd, with supply growth to rise by 970,000 bpd.
The IEA revised down its forecast for US shale oil growth by 40,000 bpd in 2025, and by 190,000 bpd in 2026.
"One of the most immediate impacts of the recent slump in oil prices is expected to fall on US shale output," it said.
