World oil demand to grow at 2.3 million barrels per day in 2023: OPEC

OPEC expects world oil demand to grow at 2.3 million bpd in 2023

World oil demand is expected to grow at 2.3 million barrels per day in 2023 aided by healthy demand in some regions, said the Organisation of Petroleum Exporting Countries (OPEC).

“In 1Q23, world oil demand is estimated to have grown by a healthy 2.1 mb/d (million barrels per day) y-o-y, on the back of a strong rebound in China’s oil demand, as well as solid oil demand data in other non-OECD regions, particularly the Middle East and Asia,” said OPEC in a report.

The oil cartel added that in second quarter of 2023, global oil demand is expected to grow by around 2.4 million bpd year-on-year. Similarly, oil demand would grow at 2.5 million bpd and 2.3 million bpd in Q3 and Q4 of 2023 respectively, forecasted OPEC.

“In the OECD (Organization for Economic Cooperation and Development), heightened mobility in the upcoming driving season in the US is expected to provide the usual additional demand for transportation fuels. However, any weakening in the economy on the back of ongoing monetary tightening measures by the US Fed may offset some of this seasonal dynamic,” stated OPEC in the report.

OPEC said oil demand is expected to grow in the non-OECD countries as well. China is projected to drive oil demand, supported by a pickup in mobility and industrial activity, according to the report by OPEC.

However, the cartel also highlighted the potential challenges to global economic development such as high inflation, monetary tightening, stability of financial markets and high sovereign, corporate and private debt levels which could affect demand.

India demand

OPEC said oil demand in India for 2023 will be driven by air travel recovery, supported by healthy mobility and steady industrial activity.

The report said jet fuel is expected to lead demand growth, followed by gasoline (petrol) and diesel in the country.

“The (Indian) government’s proposed increase in capital spending is expected to boost the momentum of economic activity, supporting construction and manufacturing activity. These factors, combined with a steady rise in airline activity, will support healthy oil demand growth in 2Q23,” said OPEC in the report.