IEA forecasts world oil demand to grow by 2.3 million b/d in 2023

China will account for 77% of the global oil demand growth in 2023, the Paris-headquartered agency said in its monthly Oil Market Report (OMR).

PHOTO: Pump jack silhouettes. Getty Images

Global oil demand is expected to grow by 2.30 million b/d to 101.90 million b/d this year due to strong consumption in China, India, and Brazil, the International Energy Agency (IEA) has stated.

The intergovernmental agency further said that refinery margins “fell sharply” during September and into October as “fuel oil and gasoline cracks collapsed.” However, it remained above the seasonal average, IEA added. The agency expects global refinery crude runs to grow by 1.70 million b/d in 2023 and by 1.0 million b/d next year.

Meanwhile, the IEA has lowered its forecast for world oil demand in 2024. It expects global oil demand growth to come down to 900,000 b/d in 2024, around 100,000 b/d lower than its previous month’s estimates. Stricter energy efficiency standards coupled with a deteriorating global economic climate could weigh on oil demand, it added.

Voluntary production cuts are expected to keep the global oil market in deficit as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) “could pump 1.3 million b/d below the call on its crude in 4Q23 [the fourth quarter of 2023],” the IEA said.

“If extra cuts are unwound in January, the balance could shift to surplus, which would go some way to help replenish depleted inventories,” the energy market watchdog further said.

However, global oil output is projected to grow by 1.5 million b/d in 2023 and by another 1.7 million b/d in 2024, the IEA said in the monthly OMR. This growth will be driven by non-OPEC+ producers like the US and Brazil, it added. Global oil output rose by 270,000 b/d in September to 101.6 mb/d, led by higher production from Nigeria and Kazakhstan, the IEA said.

“Overall OPEC+ output is set to decline in 2023, although Iran may rank as the world’s second-largest source of growth after the US,” the IEA said.

By Aparupa Mazumder 

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