Kuwait City: Secretary General of Arab Energy Organization (AEO), formerly known as OAPEC, Jamal Al-Loughani commented on the performance of the global economy during the last quarter of 2024, stating that it remained cohesive despite fluctuations in developments across individual economies. Inflation rates and positive job market indices showed a decline.
According to Kuwait News Agency, Al-Loughani added in remarks on the occasion of issuing the 2024 Q4 report on global oil conditions that pricing pressures persisted in certain economies, as did inflation in service prices. He pointed out that risks facing average global economic growth relate to negative developments, such as intense protective commercial policies leading to deterioration in commercial tensions, setbacks in global supply chains, and states of high uncertainty.
Al-Loughani forecasted a growth of 3.3 percent in 2025, slightly higher than 2024's 3.2 percent. He explained that crude oil immediate prices were disparate in Q4, with prices increasing in October due to uncertainty caused by geopolitical developments in the region. In November, prices dropped as a result of increased operations in the futures market, shrinking expectations related to the short-term oil market, and dwindling demand for crude oil.
Immediate prices rebounded in December, supported by large demand for crude oil from Europe, Asia, and the Pacific, as well as a continuous decrease in oil inventories of Organization for Economic Cooperation and Development countries. Al-Loughani noted that OPEC's crude basket dropped on a quarterly basis by 6.8 percent to USD 73.5 per barrel, while Brent crude retreated by 5.7 percent and West Texas crude by 6.4 percent.
He attributed this decrease mainly to fears of weak demand in China, accompanied by a slowdown in economic growth, decreased operation in independent refineries, and expectations of further tariffs on Chinese commodities in 2025. Global oil supplies increased by 0.3 percent in Q4 to reach 102.4 million barrels daily, driven by non-participant countries in the OPEC+ declaration, including Latin American countries, Europe, OECD countries, as well as Libya and Nigeria.
As for global demand, Al-Loughani mentioned it rose by 1.5 percent on a quarterly basis to reach 105.5 million barrels per day. Total global oil inventories decreased by 1.1 percent on a quarterly basis to reach 9.3 billion barrels by the end of 2024.
In the oil refining industry, Al-Loughani remarked that performance was enhanced due to increased operations in the Middle East, where the development and operation of multiple new refineries occurred. The development of the global crude oil market affected the economic performance of organization members during Q4, with decreased revenues negatively impacting funds and external accounts.
Despite global challenges, member states remained committed to economic reformations, which contributed to decreased inflation rates and boosted investments. This non-oil economic activity helped balance the regressing oil sector, Al-Loughani noted, adding that he expects a continuous slowdown of the sector in the short term.
Al-Loughani pointed out the OPEC+ decision to decrease output, saying it could reflect negatively on oil revenues, a significant national income source contributing to sustainable development. Regarding short-term global oil market expectations, Al-Loughani commented that the market is shrouded in uncertainty, making it difficult to determine a specific level for crude oil prices.
Investments in hydrogen projects surged globally to reach USD 680 billion in 2024, compared to USD 90 billion in 2020, Al-Loughani indicated. He noted the region's increasing interest in developing blue and green hydrogen, making it a national priority. He estimated that the region would become one of the largest green hydrogen exporters by 2050.