Oil demand to increase in the medium term: IEA

Globally, oil demand is expected to increase in the medium term, with the International Energy Agency (IEA) forecasting growth of 1.7 million barrels per day (or mb/d) in 2022 and another 2.1 mb/d in 2023, despite high oil prices and concerns about the health of the global economy.

Much of this growth is also projected to be driven by non-OECD countries and, in particular, China.

Although tight restrictions have limited Chinese demand for oil for much of the past year, restrictions have been eased in recent weeks, and any significant or sustained movement in that direction is likely to require an increase in Chinese oil imports.

At the same time, global oil supply is increasing, driven by both OPEC and non-OPEC sources, with the IEA forecasting a 1.8 mb/d increase in global oil production between June and December 2022.

However, according to Teekay, it remains to be seen how Russian oil supply and exports will be affected once the EU embargo on Russian crude imports comes into effect at the end of 2022.

In addition, concerns around the health of the global economy due to rising interest rates and inflation, and the possibility of further Covid-19 blockades in China, are key areas of uncertainty in the coming months.

Oil demand

In summary, recent months have seen significantly higher average spot prices on a year-over-year basis and a return of tanker market volatility driven by changing trade patterns and longer trip distances in midstream sectors; we expect this volatility to continue in the near term.

Looking ahead, tanker supply and demand fundamentals look very positive for Teekay, with the best fleet supply fundamentals in over 25 years and steady demand growth as global oil consumption continues to recover from the Covid-19 pandemic.


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