Global demand for oil will rebound to pre-pandemic levels by the end of 2022, as recovering economies force oil-producing countries to pump more fossil fuels, according to the International Energy Agency (IEA ).
Members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, including Russia, collectively known as Opec +, will have to “turn on the taps to ensure that global oil markets are properly supplied,” said the world energy watchdog in its monthly oil report.
Oil demand is expected to rebound by 5.4 million barrels per day this year, one of the fastest increases on record, and another 3.1 million in 2022, pushing crude consumption above 100 million for the first time by the end of next year. said the IEA.
It follows a record drop in 2020 as Covid-19 has taken hold around the world, temporarily closing factories, disrupting trade and slowing international travel, dropping demand by 9 million barrels per day .
The watchdog’s forecast of an increased appetite for crude threatens to disappoint those who hoped global oil use may have peaked in 2019 before the pandemic, and underlines “the enormous effort required to get on track “to meet the energy sector’s goal of net zero carbon by 2050, seen as crucial to tackling the climate emergency.
The IEA warned a year ago that daily global demand for oil could grow faster in 2021 than ever before, unless more green policies are adopted to curb consumption.
The deployment of the vaccine is expected to play a role in increasing oil consumption. The IEA has warned that even though the end of the pandemic is in sight in advanced economies, “slow vaccine distribution could still jeopardize recovery in non-OECD countries.”
He predicted that the post-Covid recovery will be uneven across regions of the world and that the rebound in oil demand will vary across sectors and products.
Kerosene and jet fuel will see the biggest jump in demand, increasing by 1.5 million barrels per day per year, as air travel slowly picks up after the pandemic, although the IEA anticipates the industry Aviation will be the slowest to experience a full recovery, as travel restrictions are expected to remain in place for some time.
The IEA predicts smaller increases in demand for gasoline and diesel as people return to their cars, but predicts this will remain below pre-Covid levels, due to a permanent shift to more working from home and increasing sales of electric vehicles and more efficient cars.
The IEA does not foresee any problems with oil producers being able to meet the growing demand, but added that the timing of any lifting of sanctions on Iranian oil is important.
OPEC + reduced its oil production at the start of the pandemic in 2020 and has gradually unwind the cuts, but did not present plans beyond July.
Growing demand for oil has pushed crude prices higher in recent weeks. They topped $ 72.70 a barrel on Friday, a day after closing at their highest since May 2019.
“A reopening of Europe, strong Chinese industrial activity and the recent encouraging signs from the United States are providing bullish signs to traders around the world and are the main drivers of the ongoing recovery,” said Louise Dickson, analyst of the United States. oil markets to the consultancy firm Rystad Energy.
Dickson added that there is a consensus that Opec + will need to end its conservative approach to oil production that has been in place since 2020. “Opec + will need to loosen the valve and bring it back faster. offer, otherwise risk a further spike in prices, ”she said. .