OPEC Worries About Slowing Oil Demand in The United States And Europe

Mar 13, 2023

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OPEC worries about slowing oil demand in the United States and Europe

Senior OPEC officials said that even though the demand for oil in Asia is experiencing “astonishing” growth, the slowdown in the demand for oil in Europe and the United States is causing concern to the global oil market.

OPEC Secretary-General said at the CERAWeek meeting of S&P on Tuesday: “We see a divided market, almost like two markets.” He said that in areas where inflation curbs consumption, ensuring “demand security” is as important as ensuring supply.

However, according to the latest report released by the OPEC Secretariat a few days ago, the current rebound in Asian oil demand will help maintain the basic balance of the global oil market in the first half of this year. This year, global oil consumption is expected to increase by 2.3 million barrels per day, reaching 101.7 million barrels per day. After that, due to the decline in global inventories, the OPEC+alliance led by Saudi Arabia aims to maintain the level of crude oil production unchanged for the rest of this year, and it is expected that the global oil market will tighten at that time.

He warned on Tuesday that the lack of investment in new capacity was threatening global energy security. The International Energy Agency (IEA), headquartered in Paris, said that OPEC has about 3.5 million barrels of spare capacity, accounting for about 4% of the world’s total production. Many OPEC member countries, such as Angola and Nigeria, are unable to produce crude oil according to their production quotas due to insufficient investment and operation interruption.

Although OPEC+alliance is crucial to market stability, “we can’t bear it alone”. He previously described the outlook for this year as one of “cautious optimism”.

OPEC+will hold an online meeting at the beginning of April to assess the market situation, and then a ministerial meeting will be held in June to formulate the policy of crude oil production for the rest of this year.

He said that as the Secretary-General of OPEC, one of his first tasks is to transform the public image of the oil industry from a polluter to an active participant in the energy transformation. To this end, he established the first “environmental affairs” department of OPEC+Alliance.