BAKU, Azerbaijan, August 17. China, as the second-largest oil consumer globally, is expected to drive over 70 percent of the worldwide demand growth for 2023, Trend reports.
According to the data obtained from the International Energy Agency (IEA), freed from the lockdowns of 2022 and amid a surge in petrochemical activity, China's oil demand achieved an unprecedented peak of 16.6 mb/d in June.
Rebounding from a 420,000 b/d decline in 2022, China is reclaiming its pivotal position in the global growth landscape. During 2018 and 2019, it contributed over 75 percent of the total increase in global demand, and even in 2020, amidst the global consumption collapse, it managed a modest overall rise. This dominance is anticipated to extend into 2024, with nearly 60 percent of the global advancement occurring in China, the IEA noted.
Besides the immediate rebound following anti-COVID-19 restrictions, the growth in Chinese demand is primarily driven by petrochemical feedstocks, the agency noted. The combined contribution of naphtha, LPG, and ethane will make up 57% percent of the country's total increase in 2023 (900,000 b/d out of the 1.6 mb/d total), and they will continue to account for more than half of the rise in 2024 as well.
Notably, the demand surge for these feedstocks in China will outpace the overall oil demand growth for the rest of the world in 2023. This trend is a pivotal element of a broader global phenomenon, the IEA noted.
Meanwhile, according to the report, global oil demand is projected to surpass 2019 levels by 1.4 mb/d in 2023. In parallel, LPG/ethane demand will increase by almost exactly this amount, with naphtha also experiencing a further rise of 580,000 b/d. The substantial share of LPG/ethane in the overall demand growth provides a buffer against the impact on benchmark crude oil pricing and refinery utilization. The robust output of NGLs ensures ample supply in LPG/ethane markets, maintaining pressure on naphtha usage.