The recovery of global oil demand to pre-crisis levels will occur no earlier than 2023, according to the forecast of the International Energy Agency (IEA) on the oil market for the period up to 2026, Report informs.
The IEA notes that global oil demand is still experiencing the effects of the coronavirus pandemic. According to the agency, in 2020 the demand for oil was almost 9 million barrels per day (bpd) below the level of 2019.
In the absence of more rapid policies and behavioral changes, long-term growth drivers will continue to lift oil demand, the report said.
At the same time, global oil consumption by 2026 may reach 104.1 million bpd, which is 4.4 million bpd more than the level of 2019, according to the IEA. The agency experts emphasize that the lingering effects of the pandemic, coupled with the urgency of the energy transition to low-carbon sources, may mean that oil demand will never revert to its pre-pandemic trajectory.
China and India will be the biggest contributors to the recovery in demand.
OPEC countries will provide the main growth in the global oil production in the next five years, the US will make a modest contribution to the increase in production. The slowdown in US output opens the way for OPEC+ countries to replenish most of the oil supply, according to the IEA. Oil production by OPEC+ countries will increase by 6 million bpd from 2020 to 2026, to 54 million bpd, while non-OPEC+ countries will increase production by 4 million bpd, to 50 million bpd.
At the same time, free effective oil production capacities in the world may be reduced by 2026 to a minimum due to a drop in investment, the agency said.