Global oil demand will reach an all-time high this year, but “persistent macroeconomic headwinds” mean it will not grow as quickly as had previously been expected, the International Energy Agency (IEA) has said.
The Paris-based global energy watchdog said that demand was expected to rise by 2.2m barrels a day in 2023, leading to an average of 102.1m barrels a day.
But that prediction is 220,000 barrels a day lower than its previous expectations – the first time the agency has lowered its forecast for growth this year.
China, boosted by surging petrochemical use, will account for 70% of global gains after it reopened its economy post-pandemic, the IEA’s monthly oil market report said.
However, the country’s recovery has got off to a slow start and so far “failed to extend beyond travel and services, with its economic recovery losing steam after the bounce earlier in the year”, the report added.
The IEA said that consumption in developed countries and wider Europe remains anaemic, and imports to African countries had declined due to high domestic fuel prices after subsidies were removed.
“Persistent macroeconomic headwinds, apparent in a deepening manufacturing slump, have led us to revise our 2023 growth estimate lower for the first time this year”, the report said.
It added: “World oil demand is coming under pressure from the challenging economic environment, not least because of the dramatic tightening of monetary policy in many advanced and developing countries over the past 12 months.”
The IEA said that global oil inventories looked “relatively comfortable” and had recovered to their highest level since September 2021.
China had its largest monthly increase in crude stocks in a year, fuelled by a significant rise in oil imports, which included heavily discounted barrels from Russian and Iran.
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The IEA said that oil demand growth was likely to halve next year to 1.1m barrels a day.
Last month, the IEA said that the declining global economy and push for green energy meant that the peak for demand in oil was “in sight” and could come before the end of the decade.
The IEA’s executive director, Fatih Birol, said: “The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency and other technologies advance.”
