Slowing gasoline demand anticipated in 2024 globally
In contrast to the high gasoline demand and prices experienced in 2022, the year 2023 has seen a significant drop, with US gasoline futures reaching a one-week low of around $2.11 per gallon in August 2023. This marked a substantial decrease from the 2022 peak of $4.33 per gallon.
The slower pace of global gasoline demand growth in 2023 compared to 2022 is primarily due to economic factors causing reduced fuel consumption growth and rising global supply pressures. These include concerns about US economic growth, marked by a cooling labor market and contracting factory activity, which have dampened fuel demand outlooks. Additionally, increases in oil production by OPEC+ have raised supply levels, contributing to falling gasoline prices and moderating demand growth.
According to WoodMac, China's gasoline demand will only grow by 10,000 barrels per day (b/d) this year, a 1.3% increase to 165.1 million tonnes (3.8 million b/d). This is slightly lower than China National Petroleum Corp's research division's forecast of a 2 million tonne increase, or a 1.3% growth. Sinopec's research department, however, expects a slightly higher growth of 1.7% or 3 million tonnes, to 182 million tonnes.
In contrast, China is expected to lead the way in electric vehicle (EV) adoption, with the International Energy Agency (IEA) predicting that EVs will account for 45% of all vehicle sales in China this year. This is more than half of the global EV sales, as China is expected to account for more than half of the global EV sales in 2023.
The US is also expected to see EV adoption, with electric vehicles anticipated to account for more than 11% of all vehicle sales. The US Energy Information Administration forecasts that gasoline consumption in the US will remain unchanged at 8.94 million b/d this year, down from a record 392 million gallons per day in 2018.
India's gasoline demand is growing steadily, reaching 37.2 million tonnes per year by the end of the 2023/24 financial year (ends in March 2024). By the end of the 2024/25 financial year (March 2025), gasoline demand in India is expected to increase by 5% to 39.2 million tonnes per year (908,000 b/d).
Europe is also expected to see a 2.3% or 50,000 b/d increase in gasoline demand in 2024, to 2.19 million b/d, according to FGE forecasts.
Global gasoline demand is expected to grow at the slowest pace since 2020, slowing from 700,000 b/d last year to 340,000 b/d this year, as per Wood Mackenzie's forecast. This slowdown is due to the combined effects of economic slowdown signals and increased oil supply, which have weakened the fuel demand outlook despite ongoing strong baseline consumption in major countries.
In summary, the global gasoline demand growth in 2023 is slower compared to 2022 due to economic slowdown signals and increased oil supply, leading to a tempered demand growth rate for gasoline. However, major countries like the US, China, and India continue to see strong baseline consumption of gasoline. The shift towards electric vehicles is also expected to impact gasoline demand in the coming years.
The slower gasoline demand growth in the industry, such as the US, China, India, and Europe, in 2023 compared to 2022 is influenced by economic factors that have led to reduced fuel consumption and increased oil-and-gas supply. The finance sector also plays a role, as the cooling labor market and contracting factory activity in the US, for instance, have dampened fuel demand outlooks.
The International Energy Agency predicts that China will lead the way in electric vehicle (EV) adoption, with EVs accounting for more than half of global EV sales in 2023. This shift towards EVs is expected to impact the gasoline demand in the future.
