Oil growth cools in 2025 as EVs rise and supply surges. India steps up, China slows down. A new energy map is here
A quiet shift is reshaping the global oil market in 2025. Growth is still present, but no longer racing forward. While the world once feared oil shortages, the new concern is oversupply. Despite fresh barrels entering from fields in Brazil, Guyana, and Saudi Arabia, demand growth is stepping off the gas.
Slowing Economies Drag Down Demand
Economic drag is the first reason. Major economies like the US and China are slowing. That’s cutting into oil use. The International Energy Agency (IEA) shows demand growing by just 650,000 barrels per day for the rest of 2025. This is a drop from 990,000 barrels per day at the start of the year.
Electric Vehicles Eat Into Oil Demand
The second reason lies on the road — electric vehicles. Sales have smashed records. In 2025, EVs are expected to take away up to 350,000 barrels of daily oil demand. This impact is sharpest in developed countries. The shift is quick and steady. Fewer gas pumps, more charging stations.
China Slows, India Surges
China, once the engine of oil growth, is shifting gears. Its demand is slowing. Growth stands at just 1.5% this year. This marks a huge change for a country that drove global oil demand for decades. Meanwhile, the US remains the top consumer but shows barely any growth.
India now steps up. It’s not just growing; it’s surging. India’s oil demand is set to outpace China’s in 2025. But even that rising wave can’t lift the global average by much. The total push from non-OECD nations is expected to be 860,000 barrels a day. Enough to matter, not enough to boom.
Production Increases Despite Weak Demand
While demand slows, supply speeds up. Oil production is climbing. The IEA sees global supply rising by 1.6 million barrels per day this year. Projects in Brazil, Guyana, and the North Sea are flowing in. Saudi Arabia is adding more too. OPEC+ has loosened the taps, ending past limits.
OPEC+ Faces Uneven Output Capabilities
But not every OPEC+ member can meet their new goals. Some face limits at home. Others still need to fix past overproduction. Also, geopolitical risks still hang over supply from Iran, Venezuela, and Russia.
Stockpiles Keep Rising
Stockpiles are swelling. In March, global inventories rose by over 25 million barrels. By April, they were rising again. The total build this year is expected to average 720,000 barrels per day. That’s a lot of oil sitting idle.
Prices Under Pressure
Too much oil and not enough demand have one clear result — falling prices. Some experts now talk of prices dropping to the mid-$50s unless something changes. Either demand must surprise on the upside, or supply needs a new cap.
Refining Margins Shift by Region
Refineries are also seeing changes. Margins recently hit a 12-month high. The reason? A narrowing gap in crude types helped profits, especially in Asia and the Middle East. But this won’t last forever. European refiners are still under pressure from slow demand and high carbon costs.
Looking Ahead to 2026
Future forecasts paint a clear picture. Demand may rise only slightly in 2026 — around 760,000 barrels per day. But declines in OECD countries will continue. Meanwhile, EVs will only sell more. Over 18 million EVs hit the roads yearly now. That number is not going down.
India will remain key in oil demand growth. But its rise won’t be enough to reverse the slowdown. On the other side, the US will add only 440,000 barrels a day in 2025 from light-tight oil, and even less in 2026.
Uncertainties Ahead
If global economic growth falters more, oil demand could take another hit. But a surprise rebound in manufacturing, or a shock in West Asia, could still change the course. For now, the trend is clear — more oil in storage, less oil in motion.
The Oil Engine Slows Down
The world’s energy future is shifting. It’s not a crash, but a careful drift. Oil is still central, but its grip is loosening. Technology, policy, and new habits are changing the rules. And 2025 may be remembered as the year the oil engine truly started to slow.
