World oil demand, including biofuels, rose by 0.8% (or 0.8 mb/d) in 2019. The growth was the third-lowest rate in the last ten years and lower than the 1.1% rate in 2018. Lack of growth in US domestic demand in 2019, after 2.7% growth in 2018, lowered global oil demand growth. Demand growth in China remained robust, however, accounting for more than 80% of the net growth in oil demand in 2019.

Oil demand in the United States contracted slightly in 2019, by 30 kb/d, after strong growth in 2018. Delays in the start-up of large ethane-based petrochemical projects and a slowdown in industrial production in the second half of the year both played a role. LPG/ethane demand growth slowed to 60 kb/d from 330 kb/d in 2018. Gasoline demand fell by 50 kb/d and diesel demand by 60 kb/d, reflecting a slowdown in manufacturing activities and a fall in car sales of 1.3%.

In China, oil demand rose by 680 kb/d, its highest growth since 2015, even though economic growth slowed to 6.1% from 6.6% in 2018. The country benefited from economic stimulus to support growth, investments in infrastructure expanded and oil demand from transport, especially freight, grew rapidly. There was strong growth in demand for gasoil/diesel (230 kb/d) and gasoline (120 kb/d).

In India, oil demand growth slowed to 2.8% (or 140 kb/d) in 2019, down from 4.3% (200 kb/d) in 2018. The deceleration was driven by a sharp slowdown in GDP growth, from 6.8% to 4.8%. Oil demand was also curbed by the monsoon in 2019, the heaviest in 25 years, which boosted hydropower production to record levels and reduced gasoil use for irrigation in agriculture. Heavy rains and flooding also reduced oil demand by delaying construction work and slowing overall economic activity.

Oil demand in Japan continued to fall, by 140 kb/d in 2019, as a result of energy efficiency efforts in industry and transport. In addition, temperatures were very warm in the fourth quarter, reducing heating oil demand in northern Japan. Oil demand also fell in the fourth quarter after an increase in the consumption tax in October 2019 curbed economic activity. Demand also contracted in Korea as exports slowed significantly. Both Japan and Korea were affected by the slowdown in Chinese imports during the year.

European oil demand fell by 120 kb/d. The drop was due to slower economic activity, weaker industrial production in Germany and efficiency improvements, though efficiency improved at a slower pace than recent years. German GDP growth has dropped from 1.5% in 2018 to 0.5% in 2019. Petrochemical feedstocks demand declined. Gasoline demand and diesel demand both posted small growth, however.

Russia’s oil demand rose 70 kb/d in 2019 following an increase of 80 kb/d in 2018. Kerosene demand grew as air traffic increased.

In Africa, low economic growth in South Africa (0.4%) and a switch to natural gas in Egypt put a cap on oil demand growth in 2019. Nigeria, however, contributed to increased growth.

Oil demand in Latin America continues to suffer from economic difficulties in Argentina and Venezuela. Argentina’s oil demand carried on declining, by 20 kb/d in 2019. Brazil posted a strong growth of 70 kb/d, however, on as economic activity increased.

In the Middle East, oil demand rose by 30 kb/d in 2019, after a drop of 30 kb/d in 2018, as Saudi Arabia switched to growth of 20 kb/d after a decline of 180 kb/d in 2018. Elsewhere in the region, activity remained subdued because of geopolitical tensions and social unrest.

On the oil product front, diesel posted strong growth of 460 kb/d while growth of petrochemical feedstocks (LPG and naphtha) slowed. The slowdown in global industrial activity, particularly in car manufacturing, reduced economic activity and demand for petrochemical products.

Growth in jet/kerosene demand slowed because of very warm winter conditions in the northern hemisphere, particularly in Japan and Korea where kerosene is used as a heating fuel. Jet kerosene accounted for roughly 15% of world oil demand growth in 2019.

Gasoline demand rose by 210 kb/d worldwide. The small oil price drop of 10% in 2019 helped to support gasoline demand, which is very responsive to price changes. Gasoline accounted for a quarter of demand growth in 2019.

Diesel oil demand slowed in the United States after a very strong 2018. Lower needs from the US shale industry curbed gasoil demand, which fell by 60 kb/d after strong growth in 2018 of 210 kb/d. Diesel oil consumption is estimated to have significantly increased in China, however, more than offsetting the United States slowdown. Diesel oil represented more than half of total demand growth in 2019.

The forecast for 2020 is strongly affected by the coronavirus pandemic (Oil Market Report and Oil 2020).