![]() ![]() ![]() Global upstream oil and gas investment is on track to increase by an estimated 11% in 2023 to USD 528 billion, compared with USD 474 billion in 2022. However, efficiency improvements and behavioural changes will slow the pace of growth so consumption will only surpass 2019 levels by 2027.Įnergy crisis accelerates transition away from oil It quickly accelerates and contributes the highest growth across all products over the forecast period, increasing by a substantial 2 mb/d. At the start of 2023, jet fuel demand was still lagging 2019 levels by more than 1 mb/d, or 13%. ![]() The aviation sector will expand strongly as airline travel returns to normal following the reopening of borders. The petrochemical sector will remain the key driver of global oil demand growth, with liquified petroleum gas (LPG), ethane and naphtha accounting for more than 50% of the rise between 20 and nearly 90% of the increase compared with pre-pandemic levels. For total oil demand to decline sooner, in line with the IEA’s Net Zero Emissions by 2050 Scenario (NZE Scenario), additional policy measures and behavioural changes would be required. Nevertheless, burgeoning petrochemical demand and strong consumption growth in emerging economies will more than offset a contraction in advanced economies. But demand growth in China slows markedly from 2024 onwards, and global oil demand growth shrivels from 2.4 mb/d in 2023 to just 400 kb/d by 2028. These trends are the result of a pivot towards lower-emission sources triggered by the global energy crisis, as well as policy emphasis on energy efficiency improvements and the rapid growth in electric vehicle (EV) sales.Ĭhina was the last major economy to lift its stringent Covid-19 restrictions at the end of 2022, leading to a post-pandemic oil demand rebound in the first half of 2023. Growth is set to reverse after 2023 for gasoline and after 2026 for transport fuels overall. We estimate that global oil demand reaches 105.7 mb/d in 2028, up 5.9 mb/d compared with 2022 levels.Ĭrucially, however, demand for oil from combustible fossil fuels – which excludes biofuels, petrochemical feedstocks and other non-energy uses - is on course to peak at 81.6 mb/d in 2028, the final year of our forecast. While a peak in oil demand is on the horizon, continued increases in petrochemical feedstock and air travel means that overall consumption continues to grow throughout the forecast. ![]() Uncertain global economic conditions, the direction of OPEC+ decisions and Beijing’s refining industry policy will play a crucial role in the balancing of crude oil and product markets.īased on existing policy settings, growth in world oil demand is set to slow markedly during the 2022-28 forecast period as the energy transition advances. A resulting spare capacity cushion of at least 3.8 mb/d, concentrated in the Middle East, should ensure that world oil markets are adequately supplied throughout our forecast period.Īs always, there are a number of risks to our forecasts that could affect market balances over the medium term. Our projections assume major oil producers maintain their plans to build up capacity even as demand growth slows. At the same time, upstream investments in 2023 are expected to reach to their highest levels since 2015. Russia’s invasion of Ukraine sparked a surge in oil prices and brought security of supply concerns to the fore, helping accelerate deployment of clean energy technologies. While the market could significantly tighten in the coming months as OPEC+ production cuts temper the upswing in global oil supplies, the outlook improves over our 2022-28 forecast period. Moreover, an unprecedented reshuffling of global trade flows and two consecutive emergency stock releases by IEA member countries in 2022 allowed industry inventories to rebuild, easing market tensions. Benchmark crude oil prices are back below pre-war levels and refined product cracks have now come off all-time highs after rising supplies coincided with a marked slowdown in oil demand growth in advanced economies. Global oil markets are gradually recalibrating after three turbulent years in which they were upended first by the Covid-19 pandemic and then by Russia's invasion of Ukraine. ![]()
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