BAKU, Azerbaijan, April 15. The International Energy Agency (IEA) forecasts a slight decrease in Middle East oil demand in the first quarter of 2024 - by 20,000 b/d year-on-year, Trend reports.
According to the agency, this is mainly due to a decrease in LPG/ethane use by 130,000 b/d, impacting petrochemical operations.
However, there were increases in the use of major fuels like gasoline (+60,000 b/d) and gasoil (+20,000 b/d). Direct crude oil use saw a small decline of around 40,000 b/d, but this was balanced by a similar increase in fuel oil consumption.
Looking ahead to 2024, the Middle East is expected to reclaim its position as a significant driver of demand growth, the IEA noted. An annual increase of 160,000 b/d is anticipated, primarily led by gasoline (+70,000 b/d) and gasoil (+40,000 b/d), with smaller rises in jet/kerosene (+10,000 b/d) and petrochemical feedstocks (+20,000 b/d).
While air travel from the region has plateaued since mid-2023 and even declined in some countries like Saudi Arabia compared to previous years, there's potential for growth fueled by local tourism and increased travel demand to Asian destinations, the agency pointed out.
Additionally, a gradual recovery in petrochemical activity is expected to contribute to a total regional increase of 220,000 b/d in 2025. Naphtha, LPG, and ethane are projected to rise by 100,000 b/d across several countries. Despite facing competition from China's massive capacity expansions, local producers in the Middle East, benefiting from low feedstock costs and modern facilities, are likely to achieve higher rates in the coming years.