IEA (2019), Global Energy & CO2 Status Report 2019, IEA, Paris https://www.iea.org/reports/global-energy-co2-status-report-2019
Global oil demand rose by 1.3% in 2018, led by strong growth in the United States. The start-up of large petrochemical projects drove product demand, which partially offset a slowdown in growth in gasoline demand. The United States and China showed the largest overall growth, while demand fell in Japan and Korea and was stagnant in Europe.
Global oil demand growth slowed down in 2018 as higher oil prices partially offset robust economic activity around the world. Demand grew by 1.3 mb/d (total liquid demand, including biofuels) in 2018, less than the increase of 1.5 mb/d in 2017.
Oil demand in advanced economies remained relatively robust, but, in emerging markets, oil demand slowed markedly in 2018. Average Brent oil prices were 30% higher in 2018 than in 2017.
The United States showed the largest overall growth at 540 kb/d, followed by China. The strong expansion of petrochemical demand in the United States boosted consumption, which also benefited from a rise in industrial production and very strong demand for trucking services.
Oil demand in China was up by 445 kb/d, or 3.5%, with the rate of growth slowing down as the country moved toward a less oil-intensive model of development and curbed vehicle use to improve urban air quality. In particular, environmental policies have reduced diesel demand growth, as provincial governments are keen to develop cleaner transport fuels or electric buses. Total passenger car sales in China, the world's largest auto market, fell 4.1% in 2018 from the previous year's record sales. Electric passenger car sales, meanwhile, more than doubled, from around 600 000 in 2017 to over 1.2 million in 2018.
Indian oil demand grew 5% in 2018 compared to 2017, a year when demand was lower due to the impact of the implementation of the Goods and Service Tax and demonetisation. However, the sharp increase in oil prices in 2018, amplified by currency deterioration, contributed to slowing growth in the second half of the year. Rapid industrialisation and the fast pace of growth in vehicle fleets have caused severe air quality problems, and policies are being put in place to try to tackle the problem.
Oil demand in Japan continued to contract, assisted by energy efficiency efforts in industry and transport and the reduced use of oil-based electricity generators as four nuclear reactors came back online for the first time since the Fukushima Daiichi accident in 2011. Demand also contracted in Korea, especially in the power sector where there was a significant shift in generation from oil to gas.
European oil demand remained stagnant on slowing economic activity and rising prices. Germany saw an important decline in oil demand, falling by 135 kb/d or 5.4% in 2018.
Oil demand in Eurasia rose strongly on a rebound in Russian oil demand, comprising more than 80% of the Eurasia total in 2018. Helped by strong car sales, Russian gasoline demand rose slightly in 2018 after three years of decline. Kerosene demand grew as a result of increased air traffic.
In Africa, low economic growth in South Africa and a switch to natural gas in Egypt put a cap on demand growth in 2018. Egypt started production at Eni’s supergiant Zohr gas field in December 2017, displacing oil used in the power sector.
Oil demand in Latin America continues to suffer from economic difficulties in Argentina, Venezuela and Brazil. After two years of steady decline, Brazil’s oil demand returned to modest growth in 2017 as the economy emerged from a deep recession. Argentina’s oil demand collapsed in 2018 as GDP fell by 2.6%. According to IMF data, Venezuela’s GDP fell by 18% in 2018. Oil demand has also declined, although accurate data are difficult to verify.
The Middle East saw a large decline in oil demand in 2018 mainly due to the sharp drop in Saudi Arabia’s demand, which resulted from less construction activity, a price reform, a switch to natural gas in the power sector, and high emigration. In January 2018, the government more than doubled the price of gasoline with a knock-on impact on demand.
On the product front, 2018 was the year of booming liquefied petroleum gas (LPG)/ethane demand. Supported by petrochemical developments, the strongest growth among products was posted in 2018. LPG/ethane accounted for 44% of total oil demand growth. In the United States, that share was 60%, with ethane-based steam crackers making a large contribution.
Air traffic volumes have increased significantly in recent years, particularly in China and India. Jet fuel has become a major contributor to higher oil consumption. Last year, it accounted for 20% of total global oil demand growth.
Gasoline demand growth slowed down as prices rose last year, an increase that was amplified by currency depreciation in several emerging markets. As a result, gasoline accounted for 13% of world oil demand growth in 2018, compared to 35% over the period 2014-17.
Diesel oil demand in the United States was extremely strong, supported by robust industrial growth, high imports, and the needs of the shale oil industry. Truck transport benefited from the growth in e-commerce and booming industrial production.
Diesel oil demand growth remains particularly low in Europe, which reflects slowing economic growth and the falling popularity of diesel cars. Part of the fall in diesel oil demand growth is also due to the exceptional water conditions on the Rhine river in 2018 that disrupted deliveries to Germany and Switzerland.
Diesel consumption growth is also slowing in China because of lower coal transportation and the country's shift to a new economic model. Even so, diesel accounted for 30% of world oil demand growth in 2018. Other products posted modest growth while fuel oil and naphtha demand declined slightly in 2018.