The International Energy Agency said on Tuesday that oil demand is recovering from the largest decline in history in 2020, but the decline in the aviation sector due to concerns about the Corona virus means that the world will not return to pre-pandemic demand levels until 2022.
The Energy Agency said in its monthly report, "Our first forecasts for the entire year 2021 show demand growth of 5.7 million barrels per day, which means at a level of 97.4 million barrels per day, that it will be below the 2019 level by 2.4 million barrels per day."
The Paris-based agency added that declining deliveries of jet fuel and kerosene will affect overall oil demand until at least 2022, as the aviation sector faces an existential crisis.
She explained that air travel began to increase slightly in the middle of the previous May, and that he accelerated last June with the easing of measures to contain the virus, but it remains 70% lower than 2019 levels.
The Energy Agency raised its forecast for oil demand in 2020 by about 500 thousand barrels per day due to stronger than expected Asian imports, and stated that China's strong exit from public closure measures brought demand back in April to almost the previous year’s levels, and India also witnessed a strong recovery in May. Last May, although the demand is still much lower than the levels of the previous year.
She pointed to a decline in global oil supplies by 11.8 million barrels per day in May, and said that the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, within the group known as OPEC Plus, had cut production by 9.4 million barrels per day.
The production of countries that did not participate in the agreement fell 4.5 million barrels per day since the beginning of the year, according to the agency, which indicated that the production of the United States will decrease 900 thousand barrels per day this year, and 300 thousand barrels per day next year, unless prices rise to encourage new investments in oil Rocky.
If the recent trends in production continue and demand recovers, she said, the market will stand on a more stable basis by the end of the second half of the year, but the huge uncertainties should not be underestimated.