Global Oil Demand To Reach 99.7 Million Barrels Per Day In 2022 - IEA

Global oil demand is now expected to reach 99.7 million barrels per day in 2022 and 101.8 million bpd in 2023, according to the International Energy Agency (IEA).

International Energy Agency (IEA) is an organisation that offers data, forecasts, and analysis on the global oil industry.

IEA indicated in its most recent Oil Market Report (OMR) that the projection was dependent on rising oil use for power production and the switch by several nations from gas to oil.

With gas costs on the rise, many nations have discovered a real alternative in the use of crude oil products, which has increased the consumption of black gold.

The IEA report noted that "world oil demand is now anticipated at 99.7 million bpd in 2022 and 101.8 million bpd in 2023."

Nigeria has maintained to lead the list of underperforming countries in Africa, despite OPEC's recent little increase in member countries' quotas.

In July, the country produced a pitiful 1.083 million barrels per day (bpd) as opposed to the 1.826 million bpd that the international oil cartel had allotted to it, a shortfall of about 800,000 bpd.

The military has recently been heavily deployed in the Niger Delta to combat oil theft, which has been blamed for the inability to drill for more crude oil.

Nigeria has been unable to benefit from the high prices of crude oil at a time when the price was above $100 on the world market for months, a development that has had a detrimental impact on the economy.

In addition, the new agreement with an ex-militant named Government Ekpemupolo, also known as Tompolo, valued at roughly N4 billion per month, suggests that the federal government has realised the futility of using just official forces to conduct surveillance activities on the pipelines.

President Muhammadu Buhari maintained that it was unfortunate that local warlords were guarding the assets while Nigeria has a strong military when he assumed office in 2015.

He then went for Tompolo, who was in charge of a surveillance contract under the Goodluck Jonathan administration and chased him for years in hiding before his recent comeback.

Despite Nigeria's ongoing underperformance, the IEA report noted that the world's oil supply reached a post-pandemic high of 100.5 million bpd in July as maintenance was finished in the North Sea, Canada, and Kazakhstan.

It also followed OPEC+ increasing total oil output by 530,000 bpd in accordance with increased targets and non-OPEC+ production rising by 870,000 bpd last month.

Refinery throughputs increased by 1.1 million bpd in July, according to the IEA, and are expected to increase by another 350,000 this month, bringing runs to their highest level since January 2020.

“The increase was above refined product demand, driving cracks and refinery margins sharply below the all-time highs seen in June.

"Global refinery runs are now on track to rise by 2.6 million bpd in 2022 and 1.3 million bpd next year,” it added.

Regarding the falling oil prices, it was noted that from a peak in June, prices had fallen by almost $30/bbl due to expanding oil supplies and growing worries about the status of the economy.

“At the same time, natural gas and electricity prices have soared to new records, incentivising gas-to-oil switching in some countries.

“With several regions experiencing blazing heatwaves, the latest data confirms increased oil burn in power generation, especially in Europe and the Middle East but also across Asia,” the IEA added.

According to the report, the ban imposed by the European Union (EU) on imports of Russian crude and goods, which will take full effect in February 2023, may cause further supply losses because 1 million barrels per day (bpd) of products and 1.3 million bpd of crude must find new homes.

“In a largely symbolic move, OPEC+ agreed in early August to raise its supply target by just 100,000 bpd for September, significantly lower than the July and August scheduled increases of 648,000 bpd.

“The group noted that severely limited spare capacity should be used with great caution in response to severe supply disruptions, suggesting that substantial further OPEC+ output increases are unlikely in the coming months,” the IEA explained.