Global oil demand will recover to pre-pandemic levels late next year, the International Energy Agency predicted, urging OPEC and its allies to keep markets balanced by tapping their plentiful spare production capacity.
World consumption will once again reach 100 million barrels a day in the second half of 2022 as developed economies bring the virus under control, the agency said, in its first detailed outlook for the year ahead. At some point before the end of the year, demand will surpass pre-Covid levels, it said.
The forecast counters speculation that oil use — and the resulting planet-warming emissions — may have already peaked as a result of social changes in the wake of the pandemic. The IEA itself sees consumption reaching a plateau in the 2030s, but hasn’t predicted a peak in demand.
Oil prices have rebounded to a two-year high above $70 a barrel as motorists take to the roads and economic activity picks up with the easing of lockdowns. The report — which paints a slightly more bullish picture than the agency’s last outlook — underscores that the market’s next move is in the hands of Russia and Saudi Arabia.
The Paris-based IEA made a direct plea to the OPEC+ alliance, which is led by those two countries, to continue restoring the output it cut when demand collapsed last year.
“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” said the agency, which advises most major economies. Satisfying demand growth is “unlikely to be a problem” if the 23-nation coalition acts because only a fifth of its spare capacity is needed to keep the market in balance, it said.