Uncertain global economic conditions, the direction of OPEC+ decisions and Beijing’s refining industry policy will play a crucial role in the balancing of crude oil and product markets.īased on existing policy settings, growth in world oil demand is set to slow markedly during the 2022-28 forecast period as the energy transition advances. A resulting spare capacity cushion of at least 3.8 mb/d, concentrated in the Middle East, should ensure that world oil markets are adequately supplied throughout our forecast period.Īs always, there are a number of risks to our forecasts that could affect market balances over the medium term. Our projections assume major oil producers maintain their plans to build up capacity even as demand growth slows. At the same time, upstream investments in 2023 are expected to reach to their highest levels since 2015. Russia’s invasion of Ukraine sparked a surge in oil prices and brought security of supply concerns to the fore, helping accelerate deployment of clean energy technologies. While the market could significantly tighten in the coming months as OPEC+ production cuts temper the upswing in global oil supplies, the outlook improves over our 2022-28 forecast period. Moreover, an unprecedented reshuffling of global trade flows and two consecutive emergency stock releases by IEA member countries in 2022 allowed industry inventories to rebuild, easing market tensions. Benchmark crude oil prices are back below pre-war levels and refined product cracks have now come off all-time highs after rising supplies coincided with a marked slowdown in oil demand growth in advanced economies. Global oil markets are gradually recalibrating after three turbulent years in which they were upended first by the Covid-19 pandemic and then by Russia's invasion of Ukraine.
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