BAKU, Azerbaijan, September 22. Oil demand in 2023 will be high due to gas-to-oil substitution, Trendreports with reference to the Oxford Institute of Energy Studies (OIES).
“Global oil demand growth is unchanged to 2.2 mb/d in 2022 and is upgraded to 2.1 mb/d in 2023, from 1.6 mb/d forecast previously. The upgrade in 2023 stems mainly from including in our reference case the assumption that gas-to-oil substitution will lead to 460,000 b/d incremental demand between October 2022 and March 2023, with 50 percent of the gains concentrated in Europe and 32 percent in Asia,” reads the latest OIES report.
Furthermore, the report reveals that China’s underperformance in Q3 due to the recent COVID flare-ups and strict state-policies against COVID coupled with domestic economic challenges has led us to downgrade Chinese demand growth in 2022 and now a mild contraction by 0.1 mb/d is expected for the first time in three decades. In 2023, China’s demand growth is forecast to rebound by 0.8 mb/d from 0.4 mb/d previously.
“Risks to the oil demand outlook are firmly tilted to the
downside owing to the greater macro uncertainty. Although a
recession is not yet factored in our
reference forecast, our modelled projections show that a recession
in advanced economies weakening global growth in 2023 to only 1
percent could have a substantial negative impact on demand growth
and slow sharply to 800,000 b/d y/y compared to the reference 2.1
mb/d,” the report says.