BAKU, Azerbaijan, December 14. Strong oil demand in the Middle East is anticipated to persist into the first quarter of 2024, Trend reports.
As per OPEC's recent report, in September, oil demand in the Middle East witnessed a year-on-year increase of 323,000 b/d. This growth was predominantly driven by the demand for the 'other products' category, particularly from Iraq and Saudi Arabia.
The bloc noted that the sustained robustness in oil demand across the region can be attributed to a buoyant level of economic activity. Both Saudi Arabia and the UAE have consistently demonstrated expansionary trends in their composite PMIs for over a year, registering readings of 57.1 points and 56.6 points, respectively, in September.
Moreover, IATA reported a 26% year-on-year growth in international RPKs for Middle Eastern carriers in August, with current traffic levels merely 5% below a complete recovery.
Furthermore, a continuation of robust international air traffic is foreseen. Consequently, these factors are projected to underpin the growth in oil demand within the region, with an expected expansion of 285,000 b/d year-on-year in the first quarter of 2024.
Additionally, the composite PMIs in Saudi Arabia and the UAE indicate positive trends in economic and business activity in the immediate future. In October, the Composite PMI in Saudi Arabia climbed to 59 points, an increase from 57 points in September. Likewise, in the UAE, the Composite PMI rose from 56.5 in September to 58.4 in October.
Overall, for 2024, economic activity in the region is forecasted to remain robust, with GDP growth rates expected to surpass those of 2023. Additionally, transportation activity is projected to stay healthy, providing support for gasoline, transportation diesel, and jet/kerosene. Consequently, the Middle East is anticipated to experience an average growth of 380,000 b/d year-on-year, with the majority of demand growth expected to emanate from Iraq, Saudi Arabia, and the UAE.