Soaring oil use for energy technology in Europe and the Middle East will enhance crude consumption for the remainder of the 12 months, the International Energy Agency stated on Thursday, because it elevated its international demand forecast regardless of indicators of a wider financial slowdown.
Paris-based IEA, which is primarily funded by OECD members, stated report European costs for pure fuel have been spurring “substantial” gas-to-oil switching. It lifted its demand forecast for 2022 by 380,000 barrels a day.
“These extraordinary gains, overwhelmingly concentrated in the Middle East and Europe, mask relative weakness in other sectors, but will propel demand higher by 2.1mn b/d to 99.7mn b/d in 2022 and by a further 2.1mn b/d to 101.8mn b/d in 2023,” it stated in its month-to-month oil report.
The EU’s dedication to cut back member international locations’ fuel consumption by 15 per cent from August 2022 to March 2023 will enhance oil demand by roughly 300,000 b/d for the subsequent six quarters, it added.
The new demand outlook got here because the IEA stated the affect of western sanctions on Russian oil exports had been much less extreme than it had beforehand forecast.
Russia’s exports of crude and oil merchandise to Europe, the US, Japan and Korea had fallen by practically 2.2mn b/d because the begin of the battle in Ukraine, however the rerouting of flows to international locations together with India, China and Turkey, together with seasonally increased Russian home demand, had “mitigated upstream losses”, it stated.
In July, Russian oil manufacturing was solely 310,000 b/d under prewar ranges, whereas complete oil exports have been down 580,000 b/d. As a outcome, Russia generated oil export revenues of $19bn final month, down from $21bn in June as a result of decrease costs and barely lowered volumes.
The EU embargo on Russian oil is prone to lead to additional declines after it comes into full impact in February 2023, the IEA stated. But a “possible softening of measures”, as recommended by some policymakers, had led it to revise up its Russian manufacturing forecast for the second half of 2022 by 500,000 b/d and by 800,000 b/d for 2023.
Source: www.ft.com