In recent weeks, we've been discussing growth in the Indo-Pacific, specifically Southeast Asia and India. We believe that growth in this area will replace the growth in demand that has traditionally been provided by China, particularly for the kinds of products that Australia exports.
In this issue I will examine some recent slides from the International Energy Agency's, World Energy Outlook report. The first slide outlines projections for world oil demand between now and 2030. Demand which is expected to reach just under 104 million barrels per day by 2030. Recently, oil demand has been growing by around a million barrels a day, but that growth has recently slowed to about 0.8 million barrels per day. Even with this slower growth, our projections suggest oil demand could reach 105 million barrels a day by 2030, indicating that the IEA estimates might be slightly conservative. Still, they still show a steady increase in demand for oil.
From 2015 to 2023, the biggest single increase in oil demand came from China, with an increase of 5 million barrels per day, followed by India, which saw growth of over 1 million barrels per day. Southeast Asia and Africa also contributed, each with increases of about 0.3 million barrels per day. Conversely, demand in Europe has decreased by about 0.9 million barrels per day, while North America has seen steady demand and Japan and Korea have experienced declines.
Looking ahead, the landscape of oil demand is changing significantly. The International Energy Agency notes that the rapid growth in oil demand in China has come to an end, largely due to the electrification of vehicles powered by a dramatic expansion of nuclear power and renewables. While oil demand in China may stabilise, there is a rapidly increasing demand in India, projected to grow by 2 million barrels a day. Southeast Asia and Africa will also experience growth, each by about 1.3 million barrels per day.
Between 2015 and 2023 the demand for liquefied natural gas (LNG) also rose. Between 2015 and 2023, the European Union saw a demand increase of over 100 billion cubic meters, followed by China with a growth of 74 billion cubic meters. India had smaller growth, while Southeast Asia's demand was flat. Japan’s demand fell.
The future looks different, with significant demand growth expected in the Indo-Pacific. From 2023 to 2025, China will still see a rise in demand of just under 50 billion cubic meters.
Indian LNG demand is projected to grow by about 54 billion cubic meters by 2035, and Southeast Asia, driven by increased manufacturing, is expected to see a rise of 104 billion cubic meters in demand by 2035. Japan is anticipated to see a decline in the demand for natural gas.
Overall, global LNG production is set to increase dramatically, from 600 billion cubic meters in 2024 to about 840 billion cubic meters by 2035. Australia, as a major LNG exporter, will play a crucial role in meeting rising demand, particularly driven by manufacturing growth in the Indo-Pacific, including in countries like Vietnam, the Philippines, and Indonesia.
