Chinese oil demand set to soar — RT Business News
The world’s second-largest crude consumer has recovered quickly from pandemic restrictions
Global oil producers may have to reconsider their production policies if demand in China picks up, Reuters reports, citing the International Energy Agency (IEA).
The warning comes as the OPEC+ alliance of major oil-producing nations, led by Russia and Saudi Arabia, decided last week to keep production at current levels.
“We expect about half of the growth in global oil demand this year will come from China,” IEA Executive Director Fatih Birol told the media on the sidelines of the India Energy Week conference on Sunday. He added that Chinese demand for kerosene was exploding, putting upward pressure on demand.
“If demand increases very strongly, if the Chinese economy rebounds, then, in my view, it will be necessary for the OPEC + countries to examine their [output] Strategies,” Birol noted.
In October, OPEC+ member states agreed to cut production by 2 million barrels per day from November to 2023 – the biggest production cut since 2020 – which was agreed despite US pressure to pump more .
The energy alliance has opted against further production cuts amid Western sanctions on Russia, over fears Moscow will cut oil production in response to the embargo and price caps on its oil exports by sea .
Uncertainty over Chinese demand also influenced OPEC’s decision, experts said, as the world’s biggest crude importer and number two buyer of LNG still grapples with the consequences of the Covid-19 pandemic.
Last week, the OPEC+ Joint Ministerial Monitoring Committee, which monitors the alliance’s compliance with its production quota, reportedly recommended leaving in place the production cuts agreed to last year.
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