While the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ group publicly maintain that strong demand and a tight market justify increasing oil output, the numbers in their monthly report are more circumspect.

It is largely the same for the IEA, which forecast in its July monthly report that global crude demand will grow by 700,000 barrels per day (bpd) in 2025, the slowest pace since 2009.

OPEC's July report is slightly more bullish, forecasting oil demand will increase by 1.29 million bpd in 2025, with 1.16 million bpd coming from countries outside the developed economies of the Organisation for Economic Cooperation and Development (OECD).

The forecasts from both the IEA and OPEC are now so cautious that they actually run the risk of being too pessimistic, especially in the top-importing region of Asia.

This is in stark contrast to last year, when OPEC in particular was massively bullish in its demand forecasts even as Asia's crude oil imports were declining.

There is, of course, a difference between demand forecasts and imports, but the level of seaborne imports is the key driver of crude prices, given it is this market, which accounts for about 40% of global daily oil demand, that sets the global prices.

In its July 2024 monthly report OPEC forecast that Asia's non-OECD oil demand would rise by 1.34 million bpd in 2024, with China accounting for 760,000 bpd of this.

However, Asia's crude imports actually declined in 2024, dropping by 370,000 bpd to 26.51 million bpd, according to data compiled by LSEG Oil Research.

It was the first decline in Asia's oil imports since 2021, at a time when demand was hit by the lockdowns prompted by the COVID-19 pandemic.

The gap between OPEC's bullish forecasts for much of 2024 and the reality of weak crude imports by Asia may have tempered the exporter group's forecasts for 2025.

The question is whether they are now actually being too cautious.

ASIA RECOVERY

OPEC's July monthly report forecast that non-OECD Asia's oil demand will rise by 610,000 bpd in 2025, with China the main contributor at 210,000 and India, Asia's second-biggest crude importer, seeing an increase of 160,000 bpd.

The IEA said in its July report that it expects China's total oil product demand to rise by 81,000 bpd in 2025, while India is expected to see a gain of 92,000 bpd. Total non-OECD Asia is forecast to see demand rise by 352,000 bpd.

Both the OPEC and the IEA numbers seem modest, especially since Asia's crude imports actually saw relatively strong growth in the first half of 2025.

Asia's imports in the first six months of the year were 27.25 million bpd, an increase of 510,000 bpd from the same period last year, according to calculations based on LSEG data.

Imports increased in the second quarter, especially in China, as refiners took advantage of the weakening trend in oil prices that prevailed at the time cargoes were being arranged.

It is likely that some of the increase in oil imports was used to build inventories, a process that may extend into the second half if oil prices remain soft as OPEC+ increases output amid the economic uncertainty created by U.S. President Donald Trump's ongoing global trade war.

If there is one lesson to be learnt from the difference between this year's circumspect oil demand forecasts and last year's buoyant estimates, it is that price plays a far bigger role in demand, especially in Asia.

Part of the reason Asia's crude imports fell short of forecasts in 2024 was because prices remained elevated for much of the year, reaching above $92 a barrel in April and only briefly dropping below $70 in September.

This year, prices have been softer, with benchmark Brent futures peaking at just over $82 a barrel in January, and trading as low as $58.50 in May.

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The views expressed here are those of the author, a columnist for Reuters.