Oil Demand Peaks Early as Global Seasonality Shifts
OPEC's July report highlights strong refinery throughput in June, with intake rising by 2.1 million bpd—clear evidence of robust travel-season fuel consumption in the Northern Hemisphere. Concurrently, China's major state refiners ramped up processing to over 80% capacity in late June, the highest level in five years, aiming to stockpile low inventories before peak third-quarter demand. Asia's crude imports also surged, reaching around 28.7 million bpd in June—led by China and India—though analysts caution that much of this is stockpiling due to previously low prices rather than immediate consumption.
Meanwhile, OPEC+ is preparing to increase production by roughly 548,000 bpd in August to capture this heat-driven demand surge. Still, markets remain cautious as economic headwinds in OECD nations and China's decelerating demand provide counterbalance. China's slower industrial growth, boosted NEV uptake and cooling property sector have all contributed to flattening its fuel demand growth.
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India, by contrast, is bucking the global trend. OPEC forecasts India's oil consumption to increase by 3.4 percent in 2025—more than double China's expected growth. The IEA also projects India to lead global demand growth through 2030, driven primarily by diesel and aviation fuels amid industrial expansion.
IEA data confirms a structural shift in seasonality, with winter-fuel usage declining sharply in developed nations and seasonal peaks now centred on summer transport and industrial fuel cycles. That makes Q3 the new high-water mark for global oil demand.
EIA forecasts, however, provide a nuanced counterpoint: while Q3 demand is heightened, they predict average Brent prices easing from about $69/barrel in 2025 toward $58 in 2026, reflecting broader supply growth and weaker Q4 demand. U. S. shale output, which peaked at 13.4 million bpd in the second quarter, is expected to edge lower through 2026.
Refiners in Asia, particularly China, remain under pressure due to low product stockpiles. Despite processing rates in late June reaching five‑year highs, inventories of diesel and gasoline remain near six‑year lows—spurring sustained high throughput to meet demand.
Prices are responding. Brent crude hovered around $69 a barrel following OPEC's July update, while analysts view the Q3 price uptick as partially technical, lacking support from a clear economic rebound. The EIA's projection of Q4 WTI at $82 suggests that, although demand is migrating earlier in the year, some price pressure is expected to persist into the colder months.
The seasonality transition poses strategic conundrums for OPEC+, which must time its output hikes precisely to align with this new demand curve. Should the group misjudge demand timing or overproduce, inventories could swell and prices could retreat. Meanwhile, consumer markets may benefit from lower winter fuel prices, but refiners accustomed to traditional heating demand may struggle with a flatter seasonal cycle.
Structural shifts underpinning this phenomenon include rising EV adoption in China and natural gas heating in developed markets, which have diminished heating-oil demand. In contrast, summer travel and logistics-led diesel demand in Asia have risen sharply. According to the IEA, non-OECD countries accounted for nearly all global oil consumption growth in 2025, while OECD demand stagnated or declined. Asia's combined crude import expansion of 620,000 bpd year-on-year also underscores this regional divergence.
To summarise developments shaping global oil markets this year, demand now peaks in Q3—a shift driven by evolving consumption patterns and the ascent of Asian fuel use. Policymakers, refiners and oil producers are all recalibrating to these new dynamics. How well they adapt may define market stability as the second half of the year unfolds.
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