IEA expects global oil demand to rise by 5.5 mln bpd in 2021

Oil drums

The International Energy Agency (IEA) expects global oil demand to rise by 5.5 million barrels per day (bpd) to 96.5 million bpd in 2021.

In its latest Oil Market Report – March 2021, the Paris-based agency said that global demand for crude will continue to rise, with a record 99.4 million bpd. However, global demand will not reach pre-pandemic levels until 2023.

It also expected the growth of global oil supply to slow down from 2021 to 2026 due to spending cuts, project delays and demand uncertainty on the collapse in oil prices and the pandemic.

A marginal increase in exploration and production investments is expected this year, after it retreated to a historical level by about 30% in 2020.

The agency also highlighted the rise in the crude prices to nearly $70 a barrel, with a looming supply shortage. "Oil stocks still appear abundant compared to historical levels despite the regular decline, and a huge amount of surplus production capacity accumulated as a result of OPEC+ restrictions on supplies," it added.

At the same time, the possibility of an increase in demand and continued production control in OPEC+ indicates a sharp decline in stocks during the second half of 2021, IEA noted.