New Delhi, July 11 (IANS). The International Energy Agency (IEA) has said that global crude oil demand has started improving. Oil demand fell to 97.9 million barrels per day (97.9 million barrels per day) in May, 5.3 million barrels per day less than a year earlier. However, the agency estimates that by October global oil demand will rise by more than 8 million barrels per day from May’s low and reach above 2025 levels for the first time since February.
According to IEA’s latest ‘Oil Market Report’, fuel demand will increase due to increased travel in summer. Along with this, the return of previously suppressed demand to the market will also give an additional boost to oil consumption.
However, the agency estimates that global oil demand could decline by 1 million barrels per day in 2026. After this, demand is expected to increase by 20 lakh barrels per day in 2027.
According to the IEA, supply in the global oil market may exceed demand by the end of the year. However, this estimate will depend on whether the movement of oil tankers through the Strait of Hormuz gradually normalizes. If this happens, oil producing countries will be able to increase production again and refineries in other regions including the Middle East will also be able to start supplying petroleum products normally.
The agency said this week’s renewed firing in the Gulf region shows that it will be difficult to restore normalcy to the oil market if a permanent peace agreement is not reached. IEA clearly said that permanent peace in the Gulf region is very important to stabilize the crude oil market.
According to the report, global oil reserves increased by 21 million barrels in June for the first time in four months. This increase was due to the increase in the amount of oil present in the sea, which compensated for the decrease in reserves on land.
After a decline of 73 million barrels in May, the total oil reserves of OECD countries fell by another 62 million barrels in June, of which about 44 million barrels was due to the release of oil from government reserves. At the same time, a decline of 37 million barrels was recorded in the crude oil reserves of non-OECD countries, which included a decline of 41 million barrels in China alone.
The IEA said benchmark crude oil prices continued to fall in June, wiping out gains made during the war. There was pressure on prices due to increased movement of oil tankers from the Gulf region and fears of additional supply in the market.
According to the report, the price of North Sea dated crude fell by $ 22 per barrel in a month to about $ 68 per barrel. However, after the ceasefire violations on July 7-8, prices rose again and at the time of filing the report were trading at around $77 per barrel.
The IEA also said that even though the supply of crude oil in the market has increased, the operations of refineries and the supply of petroleum products are still returning to normal at a slow pace.
Exports of refined petroleum products and LPG from Gulf countries in June were less than half of pre-war levels, while crude oil exports reached about three-quarters of February levels.
Loading from the Gulf region’s major export refineries has not yet fully resumed, indicating their operations are still affected, the report said. Additionally, escalating attacks by Ukraine on Russia’s refineries and export infrastructure have placed additional pressure on global petroleum products markets, including Russia’s, affecting both exports and domestic fuel supplies.
–IANS
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