Turuk Oil and Gas

EIA revises down slightly global oil demand growth forecasts for 2021

Consistent with earlier data and projections, we predict that worldwide consumption of petroleum and other liquid fuels will increase by 5.3 million b/d in 2021. This increase comes after a drop of 8.6 million b/d in 2020. Forecast rise in global oil consumption of 3.7 million barrels per day in 2022 would bring global oil consumption to 101.4 million barrels per day, 0.4 million barrels per day more than in 2019.

We anticipate that oil demand growth in 2021 will be pretty equally distributed between the OECD and non-OECD countries. OECD oil consumption rises by 2.5 million barrels per day, while non-OECD demand rises by 2.8 million barrels per day. Our prediction anticipates that business activity and travel would rise further in 2021 and 2022.

Oil consumption increase in 2021 will be driven by reopening economies and a return to pre-pandemic travel habits, in addition to growing economic activity. By 2022, economic growth will be the primary driver of oil demand growth.

World oil markets are rebalancing after the Covid 19 crisis spurred an unprecedented collapse in demand in 2020, but they may never return to “normal”

Researchers anticipate a 1.5 million b/d increase in US liquid fuels consumption in 2021, making it the greatest contributor to global consumption growth in the forecast. Since the beginning of 2021, Europe has seen some of the most substantial rises in our projections for oil demand.

Travel restrictions imposed by a number of European OECD countries in the first quarter of this year were gradually relaxed in the second quarter as a result of successful large-scale vaccination programmes. As a consequence of capacity constraints and restrictions on mobility and non-essential commercial activities, Europe's economic activity rose considerably in the second quarter of this year.

Analysts estimate that OECD Europe's 2Q21 liquid fuels consumption was up 1.8 million b/d from the same period in 2020, adding to our projection that OECD Europe's liquids consumption would be up 0.5 million b/d for all of 2021 compared to 2020.

The increase of oil consumption in many non-OECD nations remains uncertain. Large-scale vaccination programmes in Asia, Latin America, the Middle East, and Africa have progressed more slowly than in Europe and the United States, with a few exceptions.

Infections of COVID-19 infections, as well as the reintroduction of travel and economic restrictions, continue to be a major source of worry in these areas. Following significant outbreaks of COVID-19 infections in 1H21, Malaysia, Thailand, and Vietnam imposed restrictions on travel and economic activities in locations where the bulk of the population is uninfected.

The distribution of COVID-19 variations, as well as the efficacy of vaccinations against these variants, pose substantial risks to a full and lasting worldwide recovery. In 2Q21, India had its biggest epidemic of COVID-19 infections due to the development of the Delta form, which is allegedly more virulent and infectious than previous variations, and the outbreak resulted in a significant drop in economic activity.

If the existing vaccinations prove ineffective against the Delta or other variations, governments will be forced to depend on movement and activity limitations to stem the spread, resulting in a lengthier, more drawn-out recovery in global oil consumption.