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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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IEA: Oil Demand Will Not Return To Pre-Crisis Levels Until 2023


Global oil demand will take until 2023 to return to the pre-pandemic levels of 100 million bpd, but COVID-19 will change parts of consumer behavior forever with global gasoline demand likely past its peak already, the International Energy Agency (IEA) said on Wednesday in its annual Oil 2021 report with projections through 2026.

By 2026, global oil demand is expected at 104.1 million bpd, up by 4.4 million bpd compared to 2019 levels. Still, consumption in 2025 is projected 2.5 million bpd lower than the agency’s estimates from last year.

“Global oil demand, still reeling from the effects of the pandemic, is unlikely to catch up with its pre-Covid trajectory,” the IEA said in its annual report.

Although oil demand is set to grow from the crisis levels, “there may be no return to ‘normal’ for the oil market in the post-Covid era,” the Paris-based agency noted.

Gasoline demand worldwide likely saw its peak in 2019 because fuel efficiency gains and a shift to electric vehicles (EVs) “eclipse robust mobility growth in the developing world.”

Demand for jet fuel—the hardest hit segment of oil demand—will not return to 2019 levels by 2024, the IEA forecasts, adding that business travel could be forever changed, with muted demand due to the online meetings during the pandemic.

The refining sector will continue to struggle with excess capacity, and a new wave of refinery rationalization around the world is underway, said the IEA.

At least 6 million bpd of additional refinery shutdowns—on top of already announced 3.6 million bpd closures—will be necessary so that the global refining utilization rates return to normal levels of above 80 percent, the agency says.

In a separate report, the monthly Oil Market Report, the IEA quashed bulls’ hopes of a new supercycle and a looming supply crunch, saying that inventories still look ample, while OPEC+ has more than 9 million bpd of spare production capacity offline because of the cuts.

By Tsvetana Paraskova for Oilprice.com


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  • Mamdouh Salameh on March 17 2021 said:
    I normally ignore the International Energy Agency’s (IEA’s) projections on global oil demand and prices because they are politically motivated and therefore biased and inaccurate. The IEA represents the world’s biggest consumers of oil (mostly western consumers) and therefore its motive is to provide its members with cheap oil. That is why its projections always aim to depress oil prices for the benefit of its members.

    With the world’s population on the rise and the global economy growing, global oil demand will continue growing year after year albeit at a slightly decelerated rate because of government legislations on emissions, global energy transition and a deeper penetration of electric vehicles (EVs) into the global transport system.

    Still, global oil demand is projected to return to pre-pandemic level of 101 million barrels a day (mbd) by the middle of 2021 rising to 109 mbd by 2026 and 114 by 2030 according to my calculations.

    The global economy will continue to run on oil and gas throughout the 21st century and probably far beyond with oil being the dominant means of transport well into the future.

    Furthermore, China will continue to be the real driver of both the global economy and global oil demand well into the future aided by India.

    China’s future crude oil demand has one way to go: upwards. This is so because it will be underpinned by major economic and geopolitical factors. The first factor is that China’s economy is projected to continue growing at an average 6.5% for the next few years leading to an equivalent growth of domestic oil consumption by a similar rate. The International Monetary Fund (IMF) projects that China’s economy will grow this year at 8%.

    The second factor is that China aims to double the size of its economy by 2035. This means that China’s GDP will grow from $24.20 trillion in 2020 based on purchasing power parity (PPP) to an estimated $48.4 trillion by 2035 in line with the leadership’s long-term economic goal. China’ GDP at $24.2 trillion in 2020 was 15.6% larger than the United States’ at $20.93 trillion.

    The third factor is the Belt and Road Initiative (BRI). By helping poorer countries of the world build their infrastructure and embark on wealth-creation projects, China will not only be helping them to grow economically but it will also have access to their markets.

    The fourth factor is the projected growth in China’s oil inventories made up of both strategic petroleum reserve (SPR) and commercial inventories from 1.1 billion barrels now (equivalent to 78 days of consumption based on China’s average daily consumption of 14.56 mbd in 2019) to 120 days or 2.09 billion barrels. This will have a huge bullish effect on global oil demand and prices. Moreover, China’s energy security is uppermost in its strategic thinking. That is why China may not stop at 120 days of reserves but will go much further.

    And while the world is losing some refining capacity, China’s capacity is growing by leaps and bounds. It will soon become the world’s largest exporter of refined products.

    Oil prices are now definitely in a bull market. The sustained surge in oil prices since December has given rise to speculation that oil prices are now in a supercycle, defined as a protracted upward rise in prices due to a structural shift in the way demand outpaces supply. On the other hand, what is being described as a supercycle could be a great pent-up force which both the global economy and global oil demand were unable to release while the pandemic was raging.

    Still, there is evidence to suggest a new commodities’ supercycle has already started. Based on the various factors I outlined, I am now projecting that we could see $100 oil by the second half of 2022 or the first quarter of 2023.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Alan Dr on March 17 2021 said:
    Unlike what many experts want to make you believe the growth in world population will not keep growing into the next century. We are approaching a situation where there is only population growth in sub sharan Africa, the Middle East and a few countries in Asia namely Pakistan, Indonesia and the Philippines. All other parts of the world are in a situation of replacement rate fertility or below that. China for example is at the start of a serious population collapse and is expected to be half in population size at the end of the century. So it is a 100% certain that with population decline comes also a decline in the use of energy and fossil fuels in most parts of the world.

    It is important to be aware of this radical population development and invest accordingly.

    Some are convinced that combustion engine vehicles will stay around for decades to carry oil demand also while ignoring that price parity or in fact cheaper electric vehicles are just a few years away. Why would people buy technology that is soon more expensive and polluting? While at the same time new batteries have more long range and can charge super fast compared to the vehicles that where available just a few years ago. Somehow these experts believe that the technological development of that has come to a standstill somehow.

    Make your own conclusions.

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