The International Energy Agency (IEA) has projected that oil demand will climb by 2.2 million barrels per day (bpd) in 2023 to reach a total of 102.1 million.  

According to the body’s Oil Market Report published on Thursday, China will drive global oil demand, accounting for 70% of global gains within the year.  

Chinese growth is not happening at the rate initially expected. “China’s widely anticipated reopening [following its ‘zero-Covid’ policy] has so far failed to extend beyond travel and services, with its economic recovery losing steam after the bounce earlier in the year,” the report reads. 

In the month of June, global oil supply rose by 480,000bpd, but it is predicted to fall sharply this month as Saudi Arabia makes a one million barrel per day voluntary production cut. 

Global growth is predicted to slow to 1.1 million barrels per day in 2024. In the same year, global supply is set to rise by 1.2 million barrels per day to a new record of 102.8 million. The IEA predicts that all of this growth will be driven by countries that are not members of the Organisation of Petroleum Exporting Countries. 

The IEA reduced its growth predictions ahead of publishing the report amid economic headwinds and interest rate hikes. Its 2023 prediction is 220,000bpd lower than previous expectations. This is the first time that the agency has lowered its expectations this year. 

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The report predicts that consumption in developed countries and wider Europe will remain weaker. This follows a decline in imports to African countries due to high domestic fuel prices and lack of subsidies. 

“World oil demand is coming under pressure from the challenging economic environment, not least because of the dramatic tightening of monetary policy in many advanced and developing countries over the past 12 months,” the report said. 

Refinery crude throughput estimates were raised from 130,000bpd and 90,000bpd for 2023 and 2024, respectively, to 82.5 million barrels per day and 83.5 million barrels per day. “Higher Russian crude runs, and the start-up of new refining capacity underpin the revision,” the IEA said.