Demand for oil will surpass pre-pandemic ranges by the top of subsequent yr as the worldwide financial system recovers, the Worldwide Power Company stated on Friday, rejecting analysts’ predictions that the world’s oil utilization has already peaked.
“International oil demand is about to return to pre-pandemic ranges by the top of 2022,” the IEA stated in its monthly oil market report, predicting that demand will rise by 5.4 million barrels per day this yr and a further 3.1 million barrels subsequent yr to a mean of 99.5 million barrels per day in 2022.
Oil demand plunged by a file 8.6 million barrels per day in 2020 as coronavirus lockdowns and journey bans destroyed demand.
Confronted with this collapse, petroleum large BP said in a September report that the world had reached “peak oil,” that means that oil utilization would by no means return to pre-pandemic ranges. And in December, Bloomberg Information declared, “Peak Oil Is Abruptly Upon Us.”
However the Paris-based IEA, which is an intergovernmental group that features the US, European Union and Japan, believes proponents of the height oil concept spoke too quickly.
Within the coming years, world demand for plastics will increase gross sales of petrochemicals, whereas the restoration of the journey sector will enhance jet gas utilization, the IEA stated.
Nevertheless, the growing reputation of distant work and the rise of electrical and fuel-efficient automobiles will suppress some demand for gasoline, based on the group.
As well as, the lopsided world distribution of vaccines towards rich nations implies that oil demand in poorer nations will recuperate extra slowly, the IEA predicted.
Regardless of these tendencies, the group insisted that demand ought to surpass pre-COVID ranges by the top of 2022.
“The restoration can be uneven not solely amongst areas however throughout sectors and merchandise,” stated the IEA, which is led by Turkish power economist Fatih Birol.
The IEA stated that assembly rising world oil demand is “unlikely to be an issue” on account of elevated manufacturing by OPEC+ nations like Saudi Arabia, in addition to additional output by the US, Canada, Brazil and Norway.
If sanctions on Iran have been lifted, a further 1.4 million barrels per day would hit the worldwide oil market, the IEA stated.
In Could, US gasoline costs hit a seven-year high because the Colonial Pipeline hack shut down America’s largest pipeline.