Oil demand shifts to emerging markets Oil demand in the developing world will overtake that in industrialised countries for the first time next year, a tipping point in oil demand geography that will have profound implications for energy markets. Strong economic growth in Asia, the former Soviet Union and the Middle East has pushed up demand in these regions, while the eurozone and US remain weak, according to the latest report from the International Energy Agency. The IEA said demand in countries that did not belong to the OECD club of rich nations would reach 45.7m barrels a day next year, 600,000 b/d more than demand in OECD states. The switch will come as no surprise to most observers, since OECD oil demand has been in structural decline since 2005. It rose year-on-year in 2010, but that was seen as a post-recessionary bounce. It fell again in 2011 and is set to fall this year too. Meanwhile, in non-OECD states such as China, an expanding population, strong income growth, more energy-intensive economic activity and the prevalence of fuel subsidies that protect consumers from high international crude prices have combined to push up demand for oil. In oil-producing regions such as the former Soviet Union and the Middle East, an additional factor is the rise in crude prices, which has stimulated economic activity and encouraged more energy consumption. "This hasn't crept up and surprised everyone," says David Fyfe, head of the IEA's oil industry and markets division. The [rise of non-OECD demand] is a trend that's been under way for a long time. He noted that the phenomenon has already been observed in the refining sector, where non-OECD throughputs overtook OECD crude runs in late 2010. The IEA also said world oil demand would increase by 1m barrels a day next year, more than in the two preceding years. Global oil demand grew by 700,000 b/d in 2011 and is expected to increase by 800,000 b/d this year, so the forecast of 1m b/d for 2013 is "unmistakably an acceleration, albeit a very modest one," the agency said in its closely watched monthly oil report. But the Paris-based agency, which advises the industrialised countries on energy policy, said growth remained well below the levels seen before the global financial crisis. The IEA also slightly reduced its forecast for demand in 2012, cutting it by 15,000 b/d to 89.89m b/d "as the weaker economic backdrop marginally outweighs higher base data." Oil prices have been volatile in recent weeks, with fears that more sanctions against Iran could further disrupt supplies counterbalanced by concerns about the impact of the eurozone debt crisis on energy demand. Prices fell sharply in June but rose later in the month as Middle East tensions revived and a strike in Norway threatened the country's oil production. The IEA said that Iranian oil production fell last month to 3.2m b/d, the lowest in 22 years. Saudi Arabia offset the shortfall, ramping up its output to 10.2m b/d, the highest in 30 years.