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Oil demand is growing, and is expected to outpace pre-pandemic levels this year, according to global energy trading giant Vitol, which sees oil demand growth continuing to grow over the next decade.
Meanwhile, however, limited investments in oil production will widen the demand gap over the next few years, Vitol said.
"Whilst we anticipate oil demand falling in the long term, demand is likely to continue to grow for the next decade. Given the limited investment in production, we expect a 'demand gap' to widen over the next few years," CEO Russell Hardy said in a statement on Monday.
Vitol's bottom line benefited in part from the demand gap already in 2021, with revenues jumping to $279 billion, from $140 billion in 2020, as oil inventories fell by 2 million barrels per day, hitting multi-year lows.
While Russia's invasion of Ukraine sent oil and gasoline prices higher, "the physical energy markets were already tight as we entered the current crisis." Hardy added.
Vitol traded a total of 7.6 million barrels per day of crude oil and oil products last year, Vitol said.
Crude oil prices were elevated on Monday, with WTI rising to $111.90, up $7.20 (+6.88%) on the day, with Brent rising to $115.80, up $7.87 (+7.29%) on the day as Europe considers the possibility of it joining the United States in banning imports of Russian crude oil and Houthi rebels targeted Aramco facilities over the weekend.
While polls and some analysts have suggested that gasoline demand might see some destruction after surpassing the $4 per gallon mark, little, if any, demand destruction has been witnessed so far.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.