Demand for oil will surpass pre-pandemic ranges by the top of subsequent yr as the worldwide economic system recovers, the International Energy Agency mentioned on Friday, rejecting analysts’ predictions that the world’s oil utilization has already peaked.
“Global oil demand is set to return to pre-pandemic levels by the end of 2022,” the IEA mentioned in its monthly oil market report, predicting that demand will rise by 5.4 million barrels per day this yr and an extra 3.1 million barrels subsequent yr to a median 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.
Faced with this collapse, petroleum big 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 News declared, “Peak Oil Is Suddenly Upon Us.”
But 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.
In the approaching years, international demand for plastics will enhance gross sales of petrochemicals, whereas the restoration of the journey sector will improve jet gas utilization, the IEA mentioned.
However, the rising reputation of distant work and the rise of electrical and fuel-efficient automobiles will suppress some demand for gasoline, in accordance with the group.
In addition, the lopsided international distribution of vaccines towards rich international locations signifies that oil demand in poorer international locations will recuperate extra slowly, the IEA predicted.
Despite these developments, the group insisted that demand ought to surpass pre-COVID ranges by the top of 2022.
“The recovery will be uneven not only amongst regions but across sectors and products,” mentioned the IEA, which is led by Turkish vitality economist Fatih Birol.
The IEA mentioned that assembly rising international oil demand is “unlikely to be a problem” resulting from elevated manufacturing by OPEC+ international locations like Saudi Arabia, in addition to additional output by the US, Canada, Brazil and Norway.
If sanctions on Iran had been lifted, an extra 1.4 million barrels per day would hit the worldwide oil market, the IEA mentioned.
In May, US fuel costs hit a seven-year high because the Colonial Pipeline hack shut down America’s largest pipeline.