Demand for oil will be higher this year as industry and energy companies use more oil. Due to the high gas prices, they are opting for other fuels to maintain their production, the International Energy Agency (IEA) states in a new forecast.
Oil demand this year will be 2.1 million barrels per day higher than a year earlier. That is 380,000 barrels more daily than in an earlier estimate. The extra demand comes mainly from Europe, which wants to become less dependent on Russian gas, and from the Middle East. This is mainly because there are heat waves, so the demand for energy for air conditioners, for example, is rising faster.
The IEA does not expect oil shortages to develop despite the additional demand. On the contrary, the outlook indicates that oil inventories will increase by an average of 900,000 barrels per day for the rest of the year. This is partly because Russian oil production has remained higher than expected after the West imposed various sanctions on the country after the invasion of Ukraine. In addition, various governments are also releasing oil from strategic stocks.
Russian oil production could fall further if more sanctions are imposed. The IEA estimates there will be a 20 percent drop early next year if an import ban in the European Union goes into effect on December 5. This production decrease can start as early as next month because Russia will then send less oil to refineries.
The OPEC countries can then expect little to make up for these deficits because the countries united there no longer have much capacity to increase oil production.
