A estimate that global oil demand will stabilize by the end of 2022

estimate that global oil demand will stabilize

Global oil demand is recovering at a strong pace this June and that trend should continue in the coming quarters, according to the International Energy Agency (IEA), which estimates that the pre-crisis level will be reached by the end of 2022.

In its monthly report on the oil market published this Friday, the IEA once again insists, as it had done in May, that OPEC must open its taps more so that the world is properly supplied.

His main argument is that, unless there are changes in energy policies, by the end of next year the world will absorb 100.6 million barrels a day compared to 82.9 million in the second quarter of 2020, at the peak of its peak. of the crisis.

In 2021, the increase in demand will be 5.4 million barrels per day to an average of 96.4 million barrels per day, which represents a marginal downward revision of 50,000 barrels with respect to what had been calculated for the month past.

Next year, the rise will be less strong but also very significant, 3.1 million barrels.

The evolution will be very uneven by type of fuel. For example, while the consumption of ethanol and LPG will be 5% higher in 2022 than it was before the effects of the COVID were felt, the situation will be very different with aviation fuels: 16% per below.

The airline sector is one of the sectors that is suffering the most from the crisis due to restrictions on travel and the closure of borders.

In the shorter term, the agency believes that this June the increase in global demand for crude oil will be 2.5 million barrels per day compared to May (one of the largest monthly increases in the last year) and 7.4 million if compared to the situation twelve months ago.

The progress of the vaccination campaigns in Europe and North America (regions that together absorb 40% of the oil) largely explain these increases, which will continue in the coming months: an additional 1.2 million barrels per day in July and 1 million more in August.

The authors of the report insist that there is no concern that producing countries can respond to these trends because their surplus margins are large. But they emphasize that OPEC and its partners at their July meeting would have to consider a modification of the volumes they put on the market with their agreement.

In April, industrial reserves in the OECD remained relatively stable in absolute terms at 2,926 million barrels, although for the first time in more than a year they remained below the average in the 2015-2019 period, before the outbreak of the covid crisis.

The IEA concludes that the market seems fairly balanced in this quarter, but that in the second half, and in particular in the latter part of the year, the relationship between supply and demand could be much more tense.

Beyond what OPEC and its partners may decide next month, it also remains to be seen whether international sanctions against Iran will be lifted, which could thus bring an additional 1.4 million barrels a day to the market in a short period of time. weather.