• The lifting of COVID-19 restrictions in China is set to boost global oil demand this year to a record high, the International Energy Agency (IEA) said on Wednesday, while price cap sanctions on Russia could dent supply.
  • “Two wild cards dominate the 2023 oil market outlook: Russia and China,” the energy watchdog said in its monthly oil report. “Russian supply slows under the full impact of sanctions (while) China will drive nearly half this global demand growth even as the shape and speed of its reopening remain uncertain.”
  • Weak industrial activity and mild weather helped cut oil demand by close to a million barrels per day in OECD countries in the last quarter of 2022. But despite likely mild recessions in Europe and the U.S., China’s expected reopening is set to fuel rebounds in nearby Asian economies and see it take the lead from India as the leader in oil demand growth.
  • “The pre-eminent driver of 2023 GDP and oil demand growth will be the timing and pace of China’s post-lockdown recovery,” the IEA said.
  • The main growth in oil supply is set to come from the U.S. as output from the OPEC+ group will decline.


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