IEA: Global oil demand to return to pre-epidemic levels by the end of next year

Global oil demand will return to pre-pandemic levels by the end of 2022, the International Energy Agency (IEA) said in its monthly report on the oil market on June 11. Global oil demand fell by an unprecedented 8.6 million b/d in 2020 is expected to increase by 5.4 million b/d this year a further 3.1 million b/d in 2022.

The IEA stresses that the recovery in oil demand varies by region, sector product category. Although the epidemic is coming to an end in developed economies, the slow pace of vaccination could jeopardize the recovery in non-OECD countries. Aviation will be the slowest sector to recover, as travel restrictions will remain in place until the outbreak is brought under strict control. In addition, gasoline demand is expected to fall below pre-outbreak levels as remote working patterns continue the number of electric vehicles increases.

Global oil production rose 960,000 b/d in May the previous month to 94.3 million b/d, according to the IEA. OPEC production increased by 370,000 BPD the previous month to 25.43 million BPD, with much of the increase driven by Saudi Arabia. The implementation rate of the reduction alliance in May was 114%.

The IEA believes its members could increase production by 800,000 b/d if the alliance maintains its current policy, saying it needs to open "valves" to keep the global oil market well supplied. Global oil production is expected to rise sharply in June on the back of further weakening of production curbs by production reduction alliances. In addition, the IEA raised its forecast for production countries outside the alliance, with the U.S. leading the way, followed by Canada, Brazil Norway.

In its monthly report, the IEA also pointed to its' Global Energy Sector Net Zero Emissions Roadmap 2050 'released last month, noting that most countries' net zero commitments have yet to be supported by near-term policies measures, underscoring the magnitude of the effort required to meet climate targets.

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Source: China Energy Network