In its December Oil Market Report, the International Energy Agency (IEA) has upwardly revised its expectations for how the demand for oil will grow.
The IEA says recent consumption data for non-OECD areas indicate that demand is proving to be more resilient than previously expected, despite a year-on-year reduction in global oil demand of 110,000 barrels per day (bpd) being expected for the final quarter of this year. It has consequently increased its expected growth in oil demand by 140,000 bpd for this year, meaning it will grow by 2.3 million bpd on average over 2021. It also increased the expected growth for next year by 100,000 bpd, meaning that it expects the global demand for oil to hit 101.6 million bpd.
The organisation explained its logic in the report:
“Despite the seasonal slowdown in world oil demand and continued macro-economic headwinds, recent oil consumption data have surprised to the upside. This was especially apparent in non-OECD regions, including China, India and the Middle East. Strong gasoil use in key consuming countries outweighs weak European and Asian petrochemical deliveries.”
With there being strong symbols for future demand, it now falls to oil majors like ExxonMobil and BP—the makers of the Mobil and Castrol grease, coolant, and lubricant products—to find ways to meet this demand. After noting a 190,000 bpd drop in supply in November, the IEA also pointed out that it expects to see a sharper drop in supply in December due to the price cap on Russian crude oil.