Global oil demand slumped by 614,000 barrels per day (bpd) in December 2025, signalling a sharp slowdown in consumption at a time when supply is rising. Fresh data from the Joint Organisations Data Initiative (JODI), shared via the International Energy Forum, show that demand also dropped by 536,000 bpd compared with December 2024 with the United States driving most of the decline.
For Nigeria and other oil-dependent economies, the numbers matter. When global oil demand falls, price volatility increases, fiscal projections tighten, and foreign exchange inflows face renewed pressure.
U.S. Demand Drag Weighs on Global Oil Demand
According to JODI’s monthly report, the December contraction in global oil demand was largely triggered by weaker U.S. consumption. Although some Asian economies and Canada posted marginal gains, those increases failed to offset the American slowdown.
At the same time, global oil production surged by 2 million bpd year-on-year in December. The supply growth came primarily from the OPEC+ alliance unwinding production cuts in the second half of 2025, alongside higher output from non-OPEC producers such as the United States, Guyana, Brazil and Argentina. Notably, Saudi Arabia alone boosted output by 1.18 million bpd, while U.S. production rose by 379,000 bpd compared with a year earlier.
Rising Supply Meets Falling Demand
The imbalance between rising supply and weakening global oil demand is already reshaping inventory levels. Crude inventories across JODI-reporting countries fell by 22 million barrels in December month-on-month, yet they remain 111.7 million barrels below the five-year average. Meanwhile, refined product inventories climbed by 67 million barrels, settling 59.6 million barrels above the five-year benchmark.
Interestingly, despite the apparent oversupply narrative, oil prices have firmed in recent days. Brent Crude traded above $71 per barrel, while WTI Crude hovered around $66, supported by geopolitical tensions and tighter availability of sanctioned Russian barrels in key markets like India. In other words, geopolitical risk is offsetting bearish demand signals.
For oil exporters like Nigeria, the global oil demand slowdown presents a delicate balancing act. If demand weakness persists while supply remains elevated, prices could soften, affecting budget assumptions. However, geopolitical disruptions may continue to provide short-term price support. Ultimately, how OPEC+ manages output in the coming months will determine whether this demand slump becomes a temporary dip or the start of a broader market correction.