The International Energy Agency (IEA) has significantly downgraded its forecast for global oil demand in 2022. The reason for this is the war in Ukraine, which could cut off Russian oil from the world market. Accordingly, rising commodity prices will significantly reduce global economic growth.
The IEA lowers its forecast for global oil demand by 1.3 million barrels per day, resulting in total demand of 99.7 million barrels per day in 2022. An increase of 2.1 million barrels per day compared to 2021.
The IEA estimates that the sanctions imposed on Russia will reduce Russian oil production by 3M barrels per day starting in April, which in turn could lead to a “global oil supply shock”.
No reaction is currently expected from OPEC+, as only Saudi Arabia and the United Arab Emirates have sufficient spare capacity to significantly increase the global oil supply. Moreover, no quick agreement is expected with Iran on a nuclear deal.
The forecast for global refinery production has been lowered by 860 metric tons per day, as it is assumed that the 1.1 million barrels per day of Russian refined products will not be fully offset. Global refinery production is expected to increase by 2.9 million barrels per day in 2022.