As of: 01/18/2023 4:20 p.m
The International Energy Agency expects record global demand for oil this year. After the lifting of the strict corona restrictions in China, the hunger for energy in the country is particularly high.
Demand for oil will reach a new record high this year. This is the assumption of the International Energy Agency (IEA) in its first monthly oil report for this year. Accordingly, global demand could increase by 1.9 million barrels to a total of 101.7 million barrels a day – that would be the highest level ever.
This has mainly to do with the lifting of the strict corona measures in China. The IEA assumes that the country will be responsible for almost half of global demand growth. As a result, oil prices could be driven up, especially in the second half of the year.
At the beginning of the year, the global oil market will still show a significant surplus of crude oil. Despite the end of the zero Covid strategy in China, supply is likely to exceed demand by around one million barrels (159 liters) per day in the first three months. In the second largest economy, stronger growth in demand for crude oil is not expected until spring.
Decline in Russian oil exports
For Russia, the IEA assumes that exports will fall after the EU oil embargo. According to the report, these are likely to have fallen to their lowest level in the past year in December.
According to the association’s estimates, Russia’s sales of crude oil and fuels in December amounted to 12.6 billion dollars, significantly less than in November. In the course of the year, however, Russia was able to achieve a significant increase in revenues due to higher prices.
Concerns about the crude oil supply
In an interview with the US television channel “CNBC”, the head of the world’s largest oil company, Saudi Aramco, said that he was concerned about the global crude oil supply. Aramco CEO Amin Nasser fears there is not enough spare capacity to deal with China’s opening up and the aviation sector’s recovery at the same time.
He has concerns, especially in the medium to long term, when the capacity reserves disappear. According to the IEA, how the oil market will develop in 2023 will be determined primarily by two jokers: Russia and China. A barrel of North Sea Brent currently costs $87.4, and the price has risen by more than seven percent since last week.