Resurgent China will drive 2023 oil demand but deficit could loom -IEA
China will make up nearly half of this year’s oil demand growth after it relaxed its COVID-19 curbs, the International Energy Agency (IEA) said, but restrained OPEC+ production could mean a supply deficit in the second half.
“Supply from OPEC+ is projected to contract with Russia pressured by sanctions,” the Paris-based agency said in its monthly oil report.
“World oil supply looks set to exceed demand through the first half of 2023, but the balance could quickly shift to deficit as demand recovers and some Russian output is shut in.”
International sanctions on Russia aimed at depriving it of funds after it invaded Ukraine have so far had little impact on its oil exports, which in January were down by only 160,000 barrels per day (bpd) from pre-war levels.
But around 1 million bpd of production will be shut in by the end of the first quarter, the IEA said, following a European ban on seaborne imports and international price cap sanctions.
Source: Reuters (Reporting by Noah Browning; editing by Jason Neely)