Oil Demand Growth Slows as EV Uptake and Economic Challenges Reshape Global Energy Outlook

Muscat : Global oil demand is losing momentum as electric vehicle (EV) adoption accelerates and economic headwinds intensify, according to the International Energy Agency’s (IEA) latest monthly oil market report.

The IEA projects global oil demand to increase by only 650,000 barrels per day (bpd) during the remainder of 2025—down sharply from the 990,000 bpd growth recorded in the first quarter. The slowdown reflects rising economic uncertainty and weaker trade activity, which are curbing energy consumption across several major markets.

“The increased trade uncertainty is expected to negatively impact the global economy,” the report noted, underscoring how geopolitical tensions and market instability are dampening oil use.

Despite the mid-year demand slowdown, the IEA slightly raised its full-year 2025 oil demand growth forecast to 740,000 bpd—an upward revision of 20,000 bpd. The increase is attributed to expectations of improved economic performance in some regions and lower oil prices, which could support consumption.

Still, the agency cautioned that sluggish import demand from key emerging economies—most notably India—is limiting broader growth in oil consumption.

Looking further ahead, the IEA anticipates global oil supply to rise modestly in 2026, with an expected average increase of 760,000 bpd. This projection suggests a balanced yet cautious outlook as the energy landscape continues to evolve amid a global shift toward cleaner alternatives and greater energy efficiency.