Despite trade tensions and geopolitical uncertainty, global economic conditions in 2025 saw steady expansion. Fiscal stimulus across large economies – including Germany, Japan, India, the United States, and China – combined with easing monetary policies in most major jurisdictions, helped sustain momentum. 

These macroeconomic conditions underpin the outlook for global energy demand. In 2025, world oil demand is estimated to have increased by 1.3 million barrels per day (million bpd) year on year, according to the latest report by the Organization of the Petroleum Exporting Countries (OPEC). The bulk of this growth is expected to come from emerging economies, where demand is projected to rise by approximately 1.2 million bpd. 

Asia, driven by sustained economic activity in China, India, and neighbouring emerging markets, is anticipated to be the principal contributor. This reflects continued industrial production, transportation demand, and expanding petrochemical capacity across the region.

In contrast, demand growth in developed economies (OECD) is expected to remain modest. The OECD Americas accounted for most of the region’s increase, with oil demand rising by around 0.1 million bpd in 2025, early estimates suggest. OECD Europe is expected to see only a marginal year-on-year increase, while demand in the OECD Asia-Pacific is forecast to remain weak. These trends reflect a combination of structural eciency gains, fuel substitution, and slower population and industrial growth relative to emerging markets, OPEC noted in its report.

CONSUMPTION TO GROW

OPEC expects year-on-year global oil demand to rise by 1.4 million bpd in 2026, slightly exceeding the growth anticipated for 2025. OECD demand is seen rising by approximately 0.2 million bpd, again led by the Americas, with a small improvement in Europe. The Asia-Pacific region within the OECD is projected to remain subdued, although some recovery from 2025 levels is anticipated. In the non-OECD countries, demand is expected to grow by more than 1.2 million bpd, with other Asia once again driving expansion. 

India, China, the Middle East, and Latin America are all expected to contribute to the rise in demand, reflecting sustained economic activity and ongoing growth in petrochemical production. Demand for transportation fuels and distillates is projected to remain supported by these structural drivers. 

On the supply side, the United States is expected to account for around 0.5 million bpd growth year on year. Other key contributors include Brazil, Canada, and Argentina. These additions reflect ongoing investment in upstream projects, particularly in shale, oshore, and oil sands developments, as well as continued eciency improvements in mature producing regions. 

“Global observed inventories rose to four-year highs at 8,030 million barrels (mb),” according to the International Energy Agency (IEA). “Observed global oil stocks rose by 424 mb from January through November, or 1.3 mb/d on average. Notably, crude oil on water has surged by 213 mb since end-August, as sanctioned barrels struggled to find buyers, record long-haul shipments from the Americas to Asia boosted volumes in transit and exports from OPEC+ members in the Middle East rose on higher quotas and seasonally weaker regional demand.”

For their part, the eight OPEC+ countries, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman rearmed their decision to pause production increments in February and March 2026 due to seasonality. 

The eight participating countries reiterated that the 1.65 m bpd may be returned in part or in full subject to evolving market conditions and in a gradual manner. The countries will continue to closely monitor and assess market conditions, and in their continuous eorts to support market stability. 

GAS OUTLOOK

Global natural gas price dynamics have diverged sharply across regions in recent months as the expanding role of liquefied natural gas (LNG) reshapes global market balances. 

The World Bank’s natural gas price index rose modestly in November 2025 after a prior quarterly decline, reflecting divergent movements across major benchmarks.

In North America, US natural gas futures surpassed the USD 5 per million British thermal units (mmbtu) mark – the highest level in three years – driven by strong demand for US LNG exports to Europe and colder winter weather. In contrast, European benchmark prices declined steadily since mid-2025, reaching their lowest levels since spring 2024. 

Global gas consumption growth was subdued in 2025, rising only around 0.5% year on year as elevated prices and macroeconomic headwinds constrained demand. Unlike previous years, Europe accounted for much of the growth in demand, supported by colder weather, reduced renewable generation, and the need to refill storage. 

Meanwhile, Asian demand remained flat compared with 2024, influenced by higher LNG prices, reduced industrial consumption, and strong renewable energy output. China’s LNG imports contracted significantly due to increased domestic production and weaker overall demand. A modest rebound in global consumption – projected around 2% in 2026 – will depend largely on recovery in the Asia Pacific industrial and power sectors, the World Bank expects. 

On the supply side, strong production growth in North America underpinned global expansion in 2025, with US output rising an estimated 3% and more than half of LNG exports directed to the European Union. Russian natural gas production contracted due to reduced pipeline exports and subdued domestic demand. 

Looking ahead, total global natural gas production is forecast to grow by roughly 2.5% in 2026, driven by further growth in LNG exports from North America and Qatar as new liquefaction capacity comes online.