IEA Forecast: Oil Demand to Peak in 2029, Implications for Tanker Markets

• IEA projects global oil demand to peak in 2029 at ~105.5 mbd, with growth driven by Asia Pacific petrochemicals and aviation.
• China’s demand growth slows dramatically (+100 kbd to 2030), offset by increased demand in OECD regions.
• Supply growth in the Americas and steady demand East of Suez support crude tanker markets; product tankers face headwinds as refined fuels shift toward petrochemicals, biofuels, and regional refining.

The IEA’s Oil 2025 report forecasts a global oil demand peak in 2029 at approximately 105.5 mbd, with 2030 demand flattening and then declining. Asia Pacific leads demand growth, notably India (+1 mbd by 2030) and Indonesia (+470 kbd), fueled by petrochemical feedstocks and aviation fuels. South/Central America and Africa contribute +600 and +800 kbd respectively, with Africa seeing the strongest relative growth due to population and GDP trends.

China & OECD Demand Dynamics

China’s oil demand outlook was revised downward by 1.4 mbd by 2030, now showing only +100 kbd growth from 2024. This reflects slower GDP projections and faster than expected EV adoption. Globally, vehicle electrification is expected to displace >5 mbd of oil demand by 2030. Offsetting this, North America and Europe saw upward revisions (+1 mbd, +400 kbd), slowing only gradually due to slower EV rollouts.

Supply Landscape & OPEC+ Outlook

Global oil supply is forecast to increase by 3.4 mbd by 2030, primarily from the Americas (U.S., Canada, Guyana, Brazil, Argentina). Declining OPEC+ reliance is expected, with the IEA estimating a 1.8 mbd reduction in OPEC+ “call” by 2030—though OPEC+ may contest this view.

Refining Trends & Product Slate Shifts

Refining capacity growth (+2.5 mbd by 2030) is concentrated in the East—China and India (+1 mbd each) and the Middle East (+600 kbd)—while capacity slightly contracts West of Suez. Throughput growth is modest (+600 kbd globally), with Eastern runs up +1.3 mbd, Western output down 700 kbd. Refiners will pivot away from road fuels toward petrochemical feedstock and biofuels.

Tanker Sector Impacts & Trade Flow Outlook

• Crude Tankers: Supported by rising production in the Americas and steady demand East of Suez, although slower shifts in Eastern demand moderate long-haul flows.
• Product Tankers: Conventional refined fuel demand is easing, and as refineries emerge closer to demand hubs, clean tonne-mile demand is under pressure.
• Chemical & LPG Gas Carriers: Growth in petrochemical feedstocks and NGLs favors these specialized vessels, supplemented by rising biofuel-related cargoes.

Oil spot markets have seen sharp movements: AG VLCC rates halved after regional ceasefire news and weak late-July inquiries, settling near AG/China WS56 & AG/USG WS33. Suezmaxes and Aframaxes in the East saw mixed sentiment (Suezmax at ~WS45 westbound, Aframaxes Indo/Oz WS125). West Africa VLCCs softened to WS52.5, while Mediterranean Suezmaxes hovered around WS102.5 for TD6. In clean product tankers: LR1 (TC5 AG–Japan) dropped from WS225 to ~WS150, and LR2 (TC1) softened from near-WS200 to WS168. USG–Brazil MR (TC18) climbed to WS272, reflecting regional imbalances.

Rigorous volatility in the AG and Europe markets highlights sensitivity to geopolitical drivers. Current trends suggest crude trades remain robust, while the product sector faces near-term softness, particularly for MR and Handy segments, according to Gibson.

Tanker & Bunker Market Overview

Source: VesselsValue; IEA Oil 2025

This confluence of demand peaks, supply shifts, and geopolitical factors paints a nuanced tapestry for maritime shipping in 2025–2030: Crude tankers remain foundational; product tanker markets face adjustment; specialized cargo segments stand to benefit from evolving energy demand patterns.

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Source: Gibson

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