2024 Oil Price Forecast: Global Dependency And Egypt’s Economic Concerns

January 11, 2024


Despite increasing calls from activists, private-sector narratives, and government efforts to use more renewable energy sources (sun, wind, hydropower, and geothermal) over fossil fuel, yet oil still powers most of the global economy. 


The Energy Institute, a global association, estimated that nearly 82% of the world still relied on fossil fuels as of 2022. Eco-friendly renewable sources accounted for 14.2%, with the rest coming from miscellaneous sources.


For Egypt, forecasting oil prices in 2024 will be vital, as Central Bank of Egypt (CBE) data shows that more than a fifth of the nation’s total import bill in fiscal year 2022/2023 went for oil and its derivatives. 

Energy Information Administration

In its October Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) predicted that the annual average Brent spot price in 2024 will be $95 per barrel. It could spike to $96 in the first quarter, up from $91 in the last quarter of 2023.

The October 2023 forecast is $7, $8, and $19 higher than the September, August, and June STEOs. The EIA said that was primarily due to Saudi Arabia’s decision in September to extend its voluntary crude oil production cuts until the end of 2023, news that the U.S. commercial crude oil inventory is at its lowest level since early 2022, and geopolitical tensions, specifically in Gaza and Ukraine.

For 2024, the EIA forecasts that OPEC+, a cartel of the world’s 23 biggest producers, will decrease oil production by an additional 300,000 barrels daily over the 1.4 million cut in 2023. Meanwhile, “non-OPEC production is projected to grow by 1 million barrels a day in 2024, with new projects … contributing to the supply, alongside increased production in the U.S. and Canada.”

The EIA also anticipates the decrease of global oil inventories by 200,000 barrels a day during the second half of 2023 will remain in place throughout the first quarter of 2024 due to the OPEC+ cuts, which “maintain global oil production levels below global demand.”

However, the EIA noted some “uncertainties.” The first is increasing tensions due to wars near major oil producers. That will likely influence OPEC+ decisions once the current oil production agreement expires at the start of 2024.

The EIA also said, “Uncertain and unexpected changes in GDP growth in the coming months could affect oil demand” and, with it, prices.

International Energy Agency

In October, the International Energy Agency (IEA) said global oil demand in 2024 would increase by 880,000 barrels daily, nearly 120,000 barrels less than an earlier forecast. “Harsher global economic conditions and progress on energy efficiency will weigh on consumption,” the agency said.

The IEA also said increased adoption and use of clean energy and oil price volatility in 2022 and 2023 are vital factors that would push lower-income countries — like Nigeria, Pakistan, and Egypt — and rich OECD nations to use more renewables in 2024. “Crude rose close to $100 a barrel in September before falling on economic concerns, only to jump on [Oct. 7] on concern the clashes between Israel and Palestine Islamist group Hamas could escalate to disrupt supply,” Alex Lawier of Reuters said in October.

Those developments would increase global supply relative to international demand in 2024. “The global oil market will see a slight surplus of supply in 2024, even if the OPEC+ nations extend their cuts into next year,” Toril Bosoni, head of the oil industry and markets division at the IEA, told Reuters in November.

The IEA report didn’t forecast average prices for 2024, saying, “Global stocks are at low levels, which means that you risk increased volatility if there are surprises on either the demand side or supply side.”


Accounting for 36% of international oil production and 73% of proven reserves, the global oil producers’ cartel OPEC said oil demand in 2024 would be almost equal to what it was in 2023 despite global economic growth expected to surpass 2023’s 2.8%. “Emerging economies in Asia, notably India, as well as Brazil and Russia, may outperform expectations with improvements in domestic demand and international trade,” said an OPEC report in September. “China is expected to further boost oil consumption.”

They forecast oil demand will increase by 2.25 million barrels a day in 2024 compared to 2.44 million barrels a day in 2023.

To keep oil prices up in the face of lower demand growth rates, the OPEC report said its strategy to cut output, announced in April, will extend through 2024. OPEC also forecasts that non-OPEC nations will add 1.4 million barrels daily to their production, down from 1.7 million in 2023.

Wood Mackenzie

Ann-Louise Hittle, vice president of oil markets at Wood Mackenzie, a think tank, noted in a September blog, “The fundamentals suggest there is some scope for OPEC+ to increase production over the next two years.” She added, “non-OPEC producers are poised to account for over half of the 3.4 million barrels per day of [additional] demand we forecast for 2024 and 2025 combined.” She expects oil prices in 2024 to average $90 per barrel.

For her, the most significant risk to oil price forecasts is political decisions to appease citizens. “The economic impact of higher oil prices is felt almost immediately at the gasoline pump, hitting voters’ pockets,” Hittle said. “That opens the possibility of political” manipulation.

Sovereign rating agencies 

In a November note, Fitch Ratings expects “supply restrictions” to push average oil prices to $120 per barrel in 2024 and $100 in 2025. That is significantly higher than its September forecast of $75 and $70, respectively.

Fitch Ratings’ concern is Gaza violence could cause supply disruptions, as seven of the 13 OPEC members, including the cartel’s de facto leader Saudi Arabia, are political stakeholders in that war.

Meanwhile, Russia, the world’s third-largest oil producer and an OPEC+ member, is at odds with the United States, the world’s top oil producer and not part of OPEC+, meaning their diverging political agendas will likely cause oil price uncertainty in 2024 and 2025.

Standard & Poor’s (S&P) Global Commodity Insights predicted prices would drop from October ($93 per barrel) until March 2024, reaching $81 per barrel. In the following three quarters, S&P expects prices to hit $85 per barrel.

That forecast is mainly due to a persisting “weakening demand outlook in the U.S. and China” throughout 2024. However, S&P warns, “The potential for volatility owing to wars and economic uncertainty” could result in price volatility due to logistical disruptions or political decisions from top oil producers with diverging stances regarding the war in Gaza.

Moody’s Investors Services’ Associate Managing Director of Corporate Finance Vikash Halan told CNBC in October, “Oil prices will [average] $85 in 2023 … Our medium-term prices have remained [unchanged] at $55 to $75.”

He cited decisions by OPEC members and the ineffectiveness of Russian oil embargos in 2024 as the primary sources of price volatility.