Oil demand to surpass pre-Covid levels by end of 2022, says IEA

Oil demand is expected to exceed pre-coronavirus levels by the end of 2022, the International Energy Agency said on Friday.

Consumption declined by a record 8.6m barrels a day last year as coronavirus raged around the world. It is expected to rebound by 5.4m b/d this year as vaccines are rolled out and countries open up again.

In 2022, the IEA expects a further 3.1m b/d increase, to average 99.5m b/d with an increase at the end of the year that will surpass the level of demand before the coronavirus crisis took hold.

Still, the Paris-based body warned in its monthly oil market report that “the recovery will be uneven not only among regions but across sectors and products”.

Slow vaccine distribution, it said, could “jeopardise” any rebound.

The aviation sector will be the slowest to recover as governments keep in place certain travel restrictions “until the pandemic is brought firmly under control”, the IEA added. Petrol demand could take longer to recover as work-from-home practices continue and the rising adoption of electric vehicles offsets increased mobility.

In turn, the agency reiterated that Opec and its allies need to “open the taps” to boost oil production and keep the world well supplied. The so-called Opec+ group are expected to raise production by 2m b/d between May and July.

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