Global oil demand is set to return to pre-pandemic levels by the end of next year, creating the need for Opec+ countries to increase crude production, which is "unlikely to be a problem", the IEA said today, APA reports citing Argusmedia.
"Our first detailed look at 2022 balances confirms earlier expectations that Opec+ needs to open the taps to keep the world oil markets adequately supplied," the IEA said in its latest Oil Market Report (OMR). "Global oil demand will continue to recover and, in the absence of further policy changes, by end-2022 reach 100.6mn b/d."
The IEA forecasts that demand will grow by 5.36mn b/d this year and a further 3.07mn b/d in 2022, to average 99.46mn b/d next year. It estimates that consumption dropped by a record 8.64mn b/d in 2020.
"The recovery will be uneven not only amongst regions but across sectors and products. While the end of the pandemic is in sight in advanced economies, slow vaccine distribution could still jeopardise the recovery in non-OECD countries," the agency said. The Paris-based energy watchdog expects jet fuel and kerosine demand to grow by 1.5mn b/d in 2022, gasoline by 660,000 b/d and diesel by 520,000 b/d.
"Meeting the expected demand growth is unlikely to be a problem," the IEA said. "Even after boosting oil production by around 2mn b/d over the May-July period, Opec+ will have 6.9mn b/d of effective spare capacity."
The IEA expects supply from outside the Opec+ group to rise by 710,000 b/d this year, while Opec+ countries could increase production by 800,000 b/d "if the bloc sticks with its existing policy". It expects global oil supply to grow at a faster rate in 2022 "with the US driving gains of 1.6mn b/d from producers outside the Opec+ alliance". The US is forecast to add more than 900,000 b/d of supply next year, with Canada, Brazil and Norway also contributing to the growth.