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Global demand for oil will be solid this year, it will even reach a record level according to forecasts published on Wednesday January 18 by the IEA, the International Energy Agency. This demand will be particularly boosted by China.
China’s economic opening following the lifting of health restrictions will cause a rebound in oil consumption in 2023. Global demand is expected to reach a record level of 101.7 million barrels per day according to the IEA, i.e. a daily increase close to 2 million barrels. The Middle Kingdom, the world’s largest importer of crude, will be responsible for nearly half of this growth in demand.
In their forecasts, the analysts indeed announce a recovery of the Chinese economy, the GDP should increase in the order of 4.9% this year against 3% last year. Optimism about this economic recovery in China has even boosted the price of black gold in recent days on the markets.
Supply may not keep up with demand
On the production side, supply growth is expected to slow due to lower Russian production. For example, in December, exports of Russian crude fell by 200,000 barrels per day compared to the previous month under the effect of the embargo of Western countries indicates the IEA. This could cause tension in the markets.
These prospects for rising oil production and increased reliance on fossil fuels in general are rapidly worsening climate change, the UN warns. Moreover, the IEA report coincides with a virulent declaration on Wednesday by the Secretary General of the United Nations towards the oil giants. On the occasion of the Davos Economic Forum, Antonio Guterres accused them of having hidden for years information they had on the consequences of fossil fuels on global warming.
He calls for them to be prosecuted for their failure, like the state tobacco giants who had to pay $246 billion to 46 US states to cover the costs incurred to treat former smokers.