Global demand for oil won’t climb to pre-pandemic levels until 2023, and growth will be subdued thereafter amid new working habits and a shift away from fossil fuels, the International Energy Agency says.
As Bloomberg reports, fuel consumption will average just over 101 million barrels a day in 2023, fully recouping the 9 million a day lost last year when lockdowns emptied roads and grounded flights, the IEA says in a report.
But as trends like remote working endure, and as governments seek to limit climate change, hydrocarbon use will falter. Oil demand in the middle of this decade will be about 2.5 million barrels lower than the agency projected last year. Gasoline consumption has probably peaked already.
“Oil demand will likely never catch up with its pre-pandemic trajectory,” the Paris-based IEA said Wednesday in its annual medium-term outlook. “There may be no return to ‘normal’ for the oil market in the post-COVID-19 era.”
Crude prices have already reversed last year’s plunge, rising to almost $70 a barrel in London. It’s partly because demand in Asia has held up, but mostly as a result of vast production cuts by the OPEC+ alliance led by Saudi Arabia.
The group’s member countries stand to be the biggest winners in the years ahead, reclaiming the market share they’re now sacrificing, the IEA says. For OPEC’s long-standing rivals in the U.S. shale industry, however, the agency’s outlook has dimmed significantly. Read the full story.