Global oil demand to hit all-time high in 2023, IEA predicts
Breanne Deppisch
Video Embed
Worldwide oil demand is predicted to rise by 2 million barrels per day in 2023, the International Energy Agency said Wednesday, reaching an all-time high due largely to higher demand from China as it lifts its harsh zero-COVID policies.
Global oil demand is anticipated to reach a record high of 101.9 million bpd in 2023, the Paris-based agency said Wednesday in its closely watched Oil Market Report, up from a slowdown toward the end of 2022 and a 1.4 million-bpd rise from the previous record seen in 2019.
OHIO TRAIN DERAILMENT PRELIMINARY SAFETY REPORT TO BE RELEASED TWO WEEKS AFTER CRASH
Chinese demand is expected to rise by 900,000 bpd alone this year as Beijing moves to reopen its economy for the first time since the start of the COVID-19 pandemic.
The report is the third month in a row that the IEA has increased its oil demand forecast, and it is up by 100,000 bpd compared to last month’s predicted growth.
But the high demand could drive a supply shortfall in the second half of 2023 due to restrained OPEC+ production, the IEA said.
“World oil supply looks set to exceed demand through the first half of 2023, but the balance could quickly shift to deficit as demand recovers and some Russian output is shut in,” the Paris-based agency said.
Members of the OPEC+ cartel slashed their output targets by 2 million bpd in November last year, tightening the supply-demand balance.
The IEA said Wednesday it estimates roughly 1 million bpd of Russian oil production will be shut by the end of 2023’s first quarter following the European Union’s ban on refined petroleum products and the second half of the oil price cap backed by the world’s leading economies that took force earlier this month.
“It is still unclear how the EU embargo and price cap on oil products that took effect earlier this month will impact trade flows. Our expectation is that some Russian oil will have to be shut in as a result,” the IEA said.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
President Joe Biden said in his State of the Union address last week that the United States is going to rely on oil and gas even as his administration pursues a transition to renewable energy sources, a switch that he acknowledged would take more than a decade. “We’re still going to need oil and gas for a while,” Biden said last week, eliciting some restrained booing from Democrats in attendance.
Later, he added, “We’re going to need domestic oil for at least another decade.”