According to the International Energy Agency, global oil demand is expected to hit a record high in 2023 after China eased its Covid-19 restrictions, which could push crude prices higher in the second half of the year.
“Two wild cards dominate the oil market outlook for 2023: Russia and China,” the IEA said in its first monthly oil report of the year. “This year, oil demand could increase by 1.9 million barrels per day to 101.7 million barrels per day, the highest level on record, tightening balances as Russian supply slows below the full impact of sanctions.
Russian oil supplies were “stable” in December at 11.2 million b/d despite EU sanctions.
However, the Paris-based IEA predicted that the “well-supplied” global oil market at the start of the year could “tighten rapidly” if Western sanctions – including an EU ban on imports of Russian products refined from February 5 – took effect. full effect.
The IEA said nearly half of the projected rise in oil consumption this year would come from China, although the “shape and speed” of China’s reopening remained uncertain.
Beijing’s Covid-19 restrictions, which depressed economic activity last year, caused Chinese oil demand to plummet in 2022 for the first time since 1990, falling by an average of 390,000 bpd, its steepest annual decline ever recorded.
But the easing of quarantine and testing measures in November, followed by Beijing’s abrupt decision to abandon its zero-Covid regime in early December, had already boosted Chinese consumption, the IEA said. China’s oil demand in November rose 470,000 bpd from October, IEA data shows