Oil demand increased in 2025 by 0.65 mb/d (million barrels per day) or 1.2 EJ, but this 0.7% rise marked a further slowdown from 2024’s already-muted 0.75 mb/d of growth. The increase in both years was in line with IEA projections. The 2025 increase fell well short of the 2010-19 average annual rise of 1.4 mb/d, offering further evidence of a structural deceleration in oil markets.

This slowdown mainly reflected weaker growth in petrochemical feedstock use. Demand for naphtha, liquefied petroleum gas (LPG) and ethane – the major raw materials for plastics consumption – lagged most clearly in the second quarter of 2025 as trade turmoil weighed on international trade and disrupted key US exports to Chinese chemical plants. The full-year increase of 1.2% was well below the 2.6% recorded in 2024, when feedstocks accounted for the largest share of the overall rise in oil use.

In 2025, the growth of oil products for transport fuels – which accounted for the largest share of oil product demand – was largely steady. Despite the year’s climate of macroeconomic uncertainty, overall economic performance remained broadly robust in most major markets, which supported growth in mobility demand. However, the effect on total oil consumption growth was eroded by the rising electrification of road transport and higher biofuels use.

An additional factor supporting oil demand was steadily falling prices over the course of 2025, with an average decline of 15% compared with 2024 levels due to healthy supply increases. Supply rose by 3 mb/d in 2025 over 2024 as OPEC+ production came back online after cuts and non-OPEC+ supply, especially from the Americas, continued to climb.

Oil consumption in in the United States grew by 170 kb/d (thousand barrels per day), or 0.9%, while demand in the European Union, Japan and Korea declined by a combined 270 kb/d. Overall oil use in advanced economies in 2025 stood 1.7 mb/d (around 4%) below its 2019 level.

In the United States, a rise in petrochemical feedstock consumption narrowly outweighed the decline in transport use. By contrast, growth in petrochemical intake fell in the European Union, Japan and Korea. Operators were forced to close several plants amid intensifying competition, largely from producers in the United States and China. Overall, feedstock use of oil was flat across advanced economies.

Transport demand was lower in Japan and Korea and marginally higher in the European Union. Rises in fuel use in advanced economies were largely restricted to aviation. Improving vehicle efficiencies, particularly due to new hybrid vehicles, and incremental electrification were sufficient to offset rising activity. This resulted in flat road fuel demand in advanced economies in 2025.

Emerging market and developing economies accounted for nearly all of the increase in oil use in 2025, with their demand rising by 600 kb/d or 1.2%. More than half of this, 360 kb/d, was recorded in Asia Pacific. China reclaimed its position as the biggest source of growth, with 220 kb/d, while economies in Southeast Asia added around 100 kb/d. Other regions also saw growth: consumption in Africa rose by 190 kb/d, mainly driven by a rebound in Nigeria, while demand in Central and South America increased by 40 kb/d.

Even though China was the single largest centre of oil demand growth, the increase it recorded in 2025 – just over a third of the global total – was well below its pre-pandemic trend. Transport fuels dominated the rise in consumption from 2009 to 2021, with their consumption more than doubling across this period. However, since then, transport demand has plateaued, with jet fuel the only meaningful growth sector. In 2025, while oil use for aviation rose by 3.6%, gasoline and diesel demand were virtually unchanged.

This flatlining consumption of oil in transport has unfolded quickly, against a backdrop of strong reported GDP growth. Chinese GDP increased by a total of 20% between 2021 and 2025; for a dynamic middle-income country like China, this would usually translate into an increase of at least 10-15% in fuel use. Instead, this growth has been offset by the rapid electrification of the country’s road vehicle fleet, strong sales of natural gas-fuelled trucks and rising high-speed rail ridership.

In contrast, Chinese feedstock use has kept expanding rapidly. With the continued surge in petrochemical plant capacity and a lack of competition or substitutes – unlike in the transport sector, where EVs are displacing oil use – the increase in demand for feedstocks remained at about 200 kb/d in both 2024 and 2025, accounting for almost all of China’s increase in oil use.

Oil demand growth in India slowed sharply in 2025 to only 0.6%. Much of the disconnect between this low rate and the country’s rapid GDP growth is explained by the rapidly rising use of biofuels in road transport, which rose by around 50% in 2025. The strong monsoon season also dampened transport activity. The largest source of incremental oil product demand in India was LPG, primarily for clean cooking. This has been supported by government programs promoting the fuel for domestic use, especially in rural areas.

Demand in the Middle East was virtually flat, with growth in transport (+1%) and petrochemical feedstocks (+2%) balanced by falling power sector use (-2%). Most of this decline was in Saudi Arabia, which has ambitious goals to cut domestic consumption of oil products by 2030 by increasing power output from natural gas and renewables. Substantial progress appears to have been made in 2025, with oil demand declining by 130 kb/d despite strong summer cooling demand (a decline of over 10%).