A colder winter has pushed global oil demand higher while new US sanctions on Russia and Iran could tighten supplies from those countries, the International Energy Agency said Wednesday.
The United States announced widespread sanctions against Russia’s energy sector last week, targeting more than 180 ships and two major companies, Gazprom Neft and Surgutneftegas.
The move came one month after Washington expanded its sanctions against Iran’s “shadow fleet” of ships illicitly selling oil to foreign markets.
“While it is too early to fully quantify the potential impact from these new measures, some operators have reportedly already started to pull back from Iranian and Russian oil,” the Paris-based IEA said in its monthly oil market report.
“We maintain our supply forecasts for both countries until the full impact of sanctions becomes more apparent, but the new measures could result in a tightening of crude and product balances.”
The sanctions sent oil prices above $80 per barrel this month, the IEA noted, adding that they were also pushed upwards by speculation that US President-elect Donald Trump would take a “tough stance” on Iran’s oil exports.
Turning to world oil demand, the IEA said it grew more than forecast in the final three months of 2024 to reach its “strongest level” since the fourth quarter of 2023.
“Lower fuel prices, colder weather across the Northern Hemisphere and abundant petrochemical feedstocks all combined to boost consumption,” the report said.
Demand grew by 1.5 million barrels per day (bpd) in the fourth quarter of 2024, 260,000 bpd higher than forecast by the IEA.
For the full year, oil demand is estimated to have reached 102.9 million bpd, a slightly higher than forecast increase of around 940,000 bpd from 2023.
The IEA said it now forecasts demand to reach almost 104 million bpd in 2025, up 1.05 million bpd from 2024.
