Demand for oil will surpass pre-pandemic levels by the end of subsequent 12 months as the worldwide economic system recovers, the Worldwide Energy Agency mentioned on Friday, rejecting analysts’ predictions that the world’s oil utilization has already peaked.
“World oil demand is about to return to pre-pandemic levels by the end of 2022,” the IEA mentioned in its month-to-month oil market report, predicting that demand will rise by 5.four million barrels per day this 12 months and an extra 3.1 million barrels subsequent 12 months to a median of 99.5 million barrels per day in 2022.
Oil demand plunged by a report 8.6 million barrels per day in 2020 as coronavirus lockdowns and journey bans destroyed demand.
Confronted with this collapse, petroleum large BP mentioned in a September report that the world had reached “peak oil,” that means that oil utilization would by no means return to pre-pandemic levels. And in December, Bloomberg Information declared, “Peak Oil Is Abruptly Upon Us.”
However the Paris-based IEA, which is an intergovernmental group that features the US, European Union and Japan, believes proponents of the height oil concept spoke too quickly.
Within the coming years, world demand for plastics will increase gross sales of petrochemicals, whereas the restoration of the journey sector will improve jet gasoline utilization, the IEA mentioned.
Nevertheless, the rising reputation of distant work and the rise of electrical and fuel-efficient autos will suppress some demand for gasoline, in accordance with the group.
As well as, the lopsided world distribution of vaccines towards rich international locations implies that oil demand in poorer international locations will get better extra slowly, the IEA predicted.
Regardless of these traits, the group insisted that demand ought to surpass pre-COVID levels by the end of 2022.
“The restoration will be uneven not solely amongst areas however throughout sectors and merchandise,” mentioned the IEA, which is led by Turkish energy economist Fatih Birol.
The IEA mentioned that assembly rising world oil demand is “unlikely to be an issue” on account of elevated manufacturing by OPEC+ international locations like Saudi Arabia, in addition to additional output by the US, Canada, Brazil and Norway.
If sanctions on Iran had been lifted, an extra 1.four million barrels per day would hit the worldwide oil market, the IEA mentioned.
In Could, US gasoline costs hit a seven-year excessive because the Colonial Pipeline hack shut down America’s largest pipeline.
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