IEA Raises 2022 Global Oil Demand Estimates to 99.7m bpd

*Despite Nigeria’s underperformance, agency reports 100.5m bpd July high

Emmanuel Addeh in Abuja

The International Energy Agency (IEA) has raised its forecast for world oil demand in 2022 to 99.7 million barrels per day in 2022 and 101.8 million bpd in 2023..
In its latest Oil Market Report (OMR), the organisation which provides data, forecasts and analysis on the global oil market, stated that the projection was hinged on soaring oil use for power generation and gas-to-oil switching by many countries.
On the back of skyrocketing gas prices, many countries have found a veritable alternative in the deployment of crude oil products, raising the consumption of the black gold.

“World oil demand is now forecast at 99.7 million bpd in 2022 and 101.8 million bpd in 2023,” the IEA report stated.
Although the Organisation of Petroleum Exporting Countries (OPEC) has recently increased member countries’ quota marginally, Nigeria has continued to lead underperforming nations in Africa.

In July, the country produced a miserly 1.083 million bpd as against the 1.826 million bpd allocated to it by the international oil cartel, a shortage of almost 800,000 bpd.

To curb oil theft which has been blamed for the inability to drill more crude, there has recently been massive deployment of the military in the Niger Delta.
At a time the international price of crude oil has exceeded $100 for months, the country has been unable to take advantage of the high prices, a development that has negatively affected the economy.

In addition, the federal government appears to have realised the futility of deploying only official forces to carry out surveillance activities on the pipelines, with the recent deal with an ex-militant, Mr Government Ekpemupolo, also known as Tompolo, valued at about N4 billion monthly.
When President Muhammadu Buhari took over government in 2015, he had insisted that it was a shame that regional warlords were the ones protecting the assets when Nigeria has a capable military.
He had  thereafter gone after Tompolo who wa

s then handling a surveillance contract under the Goodluck Jonathan administration, chasing him underground for years, until his recent re-emergence.
But the IEA report stated that world oil supply hit a post-pandemic high of 100.5 million bpd in July despite Nigeria’s perennial underperformance as maintenance were completed in the North Sea, Canada and Kazakhstan.

It also came on the back of OPEC+ ramping up total oil production by 530,000 bpd in line with higher targets and non-OPEC+ production rising by 870, 000 bpd last month.
The IEA noted that refinery throughputs rose by 1.1 million bpd in July and are set for a further 350,000 gain this month, when runs will reach their highest level since January 2020.

“The increase was above refined product demand, driving cracks and refinery margins sharply below the all-time highs seen in June. Global refinery runs are now on track to rise by 2.6 million bpd in 2022 and 1.3 million bpd next year,” it added.
On the declining oil prices, it stated that rising oil supplies and escalating concerns over deteriorating economic outlook have knocked around $30/bbl off prices from a peak in June.

“At the same time, natural gas and electricity prices have soared to new records, incentivising gas-to-oil switching in some countries.
“With several regions experiencing blazing heatwaves, the latest data confirms increased oil burn in power generation, especially in Europe and the Middle East but also across Asia,” the IEA added.

It stated that the European Union (EU) embargo on Russian crude and product imports that comes into full effect in February 2023 may result in further supply declines, as some 1 million bpd of products and 1.3 million bpd of crude would have to find new homes.

“In a largely symbolic move, OPEC+ agreed in early August to raise its supply target by just 100,000 bpd for September, significantly lower than the July and August scheduled increases of 648,000 bpd.

“The group noted that severely limited spare capacity should be used with great caution in response to severe supply disruptions, suggesting that substantial further OPEC+ output increases are unlikely in the coming months,” the IEA explained.