The International Energy Agency (IEA) revised up its global oil demand estimates for 2021 and 2022 in its monthly oil report to reach “slightly above pre-COVID levels” on Thursday.
IEA estimated that global oil demand would increase 3.3 million barrels per day (bpd), or 3.4%, next year to an average of 99.6 million bpd, revising its previous estimate up by 210,000 bpd.
The agency predicted that oil demand in 2021 would reach 96.3 million bpd, increasing by 5.5 million bpd, or 6.1%. This is an upward revision from its previous report of a rise of 170,000 bpd.
The agency attributed its revision to the ongoing energy crisis, which has prompted a switch to oil that could boost demand by 500,000 bpd compared with normal conditions.
“An acute shortage of natural gas, LNG and coal supplies stemming from the gathering global economic recovery has sparked a precipitous run-up in prices for energy supplies and is triggering a massive switch to oil products and direct crude use for power generation,” it said.
As the supply crunch is impacting everything from power generation plants, to fertilizer producers, manufacturing operations and refineries, it predicted the crisis would continue impacting markets until the first quarter of 2022.
In 2022, the highest consumption is forecast to be in the Asia Pacific region with 37.2 million barrels per day, followed by the Americas with 31.1 million barrels and Europe with 14.2 million barrels. These figures constitute an increase of 4.1% in the Asia Pacific, 2.9% in the Americas, and 4.3% in Europe compared to 2021.
- Global supply declines
The IEA said global oil supply decreased by 260,000 bpd in September to 95.99 million bpd, led by steeper losses in the US from Hurricane Ida, along with reduced flows from maintenance in Canada and Norway, and seasonally lower output of biofuels.
World supply in September however, was up 5.1 million bpd year on year, the agency said.
OPEC crude oil production reached 27.15 million bpd in September, recording an increase of 340,000 bpd compared to the previous month.
A substantial boost from OPEC+ was not enough to compensate for nearly 1 million bpd of lost output from outside the alliance, it said.
Non-OPEC production saw a decrease of almost 600,000 bpd to 63.52 million bpd.
By Sibel Morrow