The IEA Oil Market Report (OMR) provides comprehensive data, forecasts, and analysis of the global oil market, covering aspects such as supply, demand, inventories, prices, and refining activity for both IEA and selected non-IEA countries.
Key Findings:
- Oil Demand: World oil demand is projected to grow by 2.4 million barrels per day (mb/d) in 2023, reaching a new record of 102.3 mb/d. China’s oil demand has rebounded significantly, reaching an all-time high of 16.3 mb/d in April. Non-OECD countries are driving most of the demand growth, while OECD demand remains sluggish due to the ongoing manufacturing slump.
- 2024 Outlook: The macroeconomic climate is expected to become increasingly adverse in 2024, leading to a slowdown in oil demand growth to 860 kb/d as the post-pandemic recovery largely runs its course.
- Supply Growth: Non-OPEC+ countries are anticipated to lead world supply growth in the coming years, with an addition of 1.9 mb/d in 2023 and 1.2 mb/d in 2024. In contrast, OPEC+ production is set to decline by 200 kb/d in 2024 due to continued production curbs.
- Oil Supply Levels: Total oil supply is predicted to reach record highs of 101.3 mb/d in the current year and 102.3 mb/d in the following year. In May, world oil supply fell by 660 kb/d to 100.6 mb/d due to additional cuts from some OPEC+ producers, and Saudi Arabia announced further output curbs of 1 mb/d in July.
- Russian Oil Exports: Russian oil exports experienced a decline of 260 kb/d in May to 7.8 mb/d, similar to levels seen a year ago. Crude oil exports increased slightly, while product exports saw a significant drop. China and India were major destinations for Russian exports, accounting for at least 56% of the total, while Africa, the Middle East, and Latin America made up another 12%.
- Refinery Throughputs: Global refinery throughputs are forecasted to increase by 1.8 mb/d in 2023 and 1 mb/d in 2024, reaching an average of 83.4 mb/d. While OECD crude runs are expected to decline, the increase in non-OECD activity, especially in Oman and Kuwait, along with discounted Russian crude availability in Asia, will offset the decline.
- Oil Inventories: Global observed oil inventories rose by 10 mb in April. OECD industry stocks rose by 33.6 mb but remained 86.4 mb lower than the five-year average. Preliminary data for May indicates a further stock build in OECD countries of 21.1 mb.
- Oil Prices: North Sea Dated oil prices fell by around 10% in May compared to April, driven by concerns about the impact of hawkish central bank policies on the global economy. The current ICE Brent future price of around $73/bbl is significantly lower than the peak of $123/bbl in the summer of 2022. Saudi Arabia’s announcement of deeper output cuts in early June did not halt the price decline.
Overall, the report indicates robust growth in oil demand, led by non-OECD countries, while supply is expected to increase mainly from non-OPEC+ nations. However, concerns about the global economic climate and the bearish trend in oil prices pose challenges for the industry in the coming months.