IEA forecasts world oil demand to grow by 2.4 million b/d in 2023
China is projected to account for 1.80 million b/d of the total 2.40 million b/d of global oil demand growth in 2023, the Paris-headquartered agency said in its monthly Oil Market Report (OMR).
PHOTO: IEA's Paris HQ entrance gate. IEA
Global oil demand is projected to grow by 2.40 million b/d to 102 million b/d this year, and is set to reach a record annual high of 102.90 million b/d in 2024 due to strong consumption in the US, China, India, and Brazil, the International Energy Agency (IEA) has stated.
“Non-OPEC+ will again drive overall growth in 2024, projected at 1.60 million b/d, to an unprecedented 103.40 million b/d” the IEA added.
The US and China will be the key drivers of oil demand in 2023 as “US deliveries proved more resilient than indicated by preliminary data and Chinese oil demand in September set another all-time high above 17 million b/d, fuelled by a booming petrochemical sector,” the Paris- based agency said.
Voluntary production cuts are expected to keep the global oil market in “significant deficit” through year-end as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) “could pump 900,000 b/d below the demand for its crude,” the IEA said.
The IEA projects a marginal impact on global oil supply in 2024 due to the temporary easing of US sanctions on OPEC+ producer Venezuela. The agency expects that "production increases from the country’s battered oil sector will take time and investment".
The ongoing conflict between Israel and Palestine-based Hamas militants has not caused any physical damage to the oil supply yet, offsetting fears of a tighter global oil market condition in 2024. The IEA noted that fears of the conflict escalating into a wider regional conflict, disrupting oil supply flows, have not materialised.
The IEA reported that refinery margins decreased in October from the "near-record levels" of the third quarter of 2023 as refineries ramped up activity before seasonal maintenance. Despite this, the margins remained above the five-year average. The agency anticipates global refinery crude runs to increase by 1.90 million b/d in 2023 and by 1 million b/d in 2024, averaging 82.6 million b/d and 83.6 million b/d, respectively.
“For now, demand is still exceeding available supplies heading into the Northern Hemisphere winter, [oil] market balances will remain vulnerable to heightened economic and geopolitical risks, and further volatility ahead,” the Paris-headquartered energy agency noted.
By Aparupa Mazumder
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