HomeTop Global NewsIEA Expects Record Oil Demand and Surging Prices in 2023

IEA Expects Record Oil Demand and Surging Prices in 2023

According to a new report by International Energy Agency, oil demand will hit a new record this year, resulting in surging prices of crude oil.

The IEA’s report predicts that the demand will come close to 102 million barrels per day in 2023, which is two million barrels more compared to the previous year. The increased demand will be met with a supply deficit caused by surprising oil production cuts announced by OPEC+ countries.

“Oil market balances were already set to tilt into a substantial deficit in the second half of this year, but the new cuts risk further tightening balances and pushing up oil prices at a time when inflationary pressures are already hurting vulnerable consumers,” the IEA says in the report.

According to IEA, the increased prices of oil will affect consumers and hamper economic growth. 

“Consumers confronted by inflated prices for basic necessities will now have to spread their budgets even more thinly. This augurs badly for the economic recovery and growth,” it added.

OPEC+ countries agreed in early April to cut their oil production by more than 1.5 million barrels per day throughout the end of the year. Oil producers that are not part of OPEC are expected to ramp up their production in the same period, but the increase will likely not be enough to satisfy the demanding oil market.

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