Oil demand to reach its pre-pandemic level in 2022

Oil&Gas Materials 22 October 2021 14:01 (UTC +04:00)
Oil demand to reach its pre-pandemic level in 2022

BAKU, Azerbaijan, Oct.22

By Leman Zeynalova – Trend:

Crude oil prices (an average of Brent, Duabi, and WTI) are expected to average $74/bbl in 2022, up from a projected $70/bbl in 2021, and then decline to $65/bbl in 2023, Trend reports with reference to the World Bank.

“Oil demand is expected to reach its pre-pandemic level in 2022, although estimates for the speed of recovery vary among forecasters. Large EMDEs, notably China, India, and Russia, account for most of the rise in demand, while demand in several advanced economies remains subdued and may not recover to pre-pandemic levels,” reads the WB report.

Prior to the pandemic, demand in most advanced economies, particularly in Europe, had been declining for several years. Oil demand is expected to be boosted by increasing substitution for natural gas in heating and electricity generation, with estimates that it could raise demand by about 0.5 mb/d.

Continued use of crude oil as a substitute for natural gas presents an upside risk to the demand outlook, while downside risks include the potential for higher energy prices to weigh on growth, as well as renewed outbreaks of COVID-19. For supply, the impact of persistently weak investment on new crude oil production presents the biggest upside risk, while a new nuclear deal for Islamic Republic of Iran, which would lift the country’s exports, offers a downside risk.


Follow the author on Twitter: @Lyaman_Zeyn