Despite economic uncertainties, global oil consumption is expected to grow by 1.84 million barrels per day year-on-year to 101.9 million barrels per day by 2023, according to a recent report released by Saudi Arabia’s King Abdullah Petroleum Research Center (KAPSARC).
This is a slight upward revision of 50,000 BPD from previous forecasts.
“While growth forecasts for the US and Europe have been downgraded, those for Asia have been upgraded on expectations that the current turmoil will subside in the second half of the year. The net demand effect is an increase of 50,000 barrels a day.” KAPSARC said in the report.
Demand is expected to continue growing at a slightly higher rate to 1.91 million barrels per day in 2024, the consulting think tank noted.
“We expect transport fuels to drive fuel demand growth, followed by heavy fuels if construction begins on large projects in the country. These mega projects and Saudi Arabia’s goal of achieving 50% renewable energy and 50% natural gas power generation are part of the Kingdom’s Vision 2030.” “KAPSARC added.
According to the report, oil demand in OECD countries is expected to grow by 300,000 b/d year-on-year in 2023, while non-OECD oil demand is likely to grow by 84 percent this year to 154,000 b/d.
The KAPSARC Oil Market Outlook suggests an overall decline in demand growth in OECD countries in the first two quarters of 2023, with non-OECD countries continuing to grow.
“However, in the second half of 2023, OECD countries are expected to begin to recover some of the lost demand, while non-OECD countries will maintain moderate growth in the third quarter and then decline in the fourth quarter.” KAPSARC added in the report.
The report further states that the current uncertainty surrounding the global economy is expected to affect mainly OECD countries in 2023, with a lesser impact on non-OECD countries.
Founded in 1961, the OECD has 38 member countries, including Austria, Greece, France, Norway, the United States, Canada and others.
The report further noted that a poll conducted by KAPSARC found that 87 percent of people believe there could be a global recession in 2023 and social unrest if inflation continues.
On the supply side, KAPSARC said global oil supply is expected to grow by about 1.97 million barrels per day in 2023, down 710,000 barrels per day from its previous forecast.
At the same time, global oil supply is expected to grow by 2.45 million barrels per day in 2024, 150,000 barrels per day higher than KAPSARC’s previous forecast.