IEA predicts record oil consumption in 2023

In 2023, global oil consumption will rise by 1.9 million barrels to a record 101.7 million barrels per day, the International Energy Agency (IEA) predicts. The main uncertainties surrounding the markets are Russia and China, although about half of the expected growth is due to China, the report on the development of the oil market of the organization noted.

Measures to improve energy efficiency, as well as the electrification of transport, will slightly reduce the demand for oil – by 900,000 barrels per day. In the first months of the year, the demand will be under the pressure of what is happening in China, the analysts add.

The year starts with a good balance on the market, but it can change very quickly if Russia starts to reduce exports against the background of Western sanctions.

The IEA’s forecast for oil production in 2023 points to a drop of about 1 million barrels per day, after an increase of 4.7 million barrels per day in 2022. The main reason is the drop in supplies from Russia, while the US, Canada, Brazil and Guyana will increase supplies to the world market.

In December 2022, Russian oil exports decreased by 200,000 barrels to 7.8 million barrels per day. Because of the sanctions against Russia, revenues from the sale of oil decreased by $3 billion compared to November and reached $12.6 billion. This is the lowest revenue since February 2021 and is due to the heavy discounts the country has to offer its few remaining customers due to Western sanctions.

Shortly before the ban on the purchase of Russian fuels in the EU came into force, the export of diesel from Russia reached its highest level in years – 1.2 million barrels per day, of which 720 thousand are directed to Europe. The diesel market is one of the most problematic this year amid the return of demand after the coronavirus pandemic and bans on the purchase of Russian fuels in the EU, the IEA adds.

The average price of European Brent crude on global markets fell almost $10 to just over $81 a barrel in December amid concerns that China’s gross domestic product will fall due to the coronavirus pandemic.

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