OPEC expects oil demand to slow in 2023

The Organization of the Petroleum Exporting Countries (OPEC) expects global demand for oil to increase next year, but at a slightly slower pace than this year, as consumption will receive support from the improved control of the Covid-19 pandemic and the continued recovery of global economic growth.

In its monthly report, OPEC said it expects global oil demand to increase by 2.7 million barrels per day in 2023. It left its forecast for demand growth this year unchanged at 3.36 million barrels per day.

Oil use increased after its decline due to the pandemic in 2020, and is expected to exceed 2019 levels this year with prices reaching record-high levels. But higher crude prices and the outbreak of the Coronavirus in China have slashed growth forecasts for 2022.

OPEC said its forecast for 2023 assumes that there will be no escalation in the Ukraine war and that risks such as rising inflation will not have a strong impact on global economic growth.

The organization and its allies, including Russia, or the bloc known as OPEC +, are raising production after record cuts in 2020 due to the pandemic.

In the past months, OPEC + reduced the targeted production increases due to the lack of investment by some OPEC members in oil fields and Russian production losses.

The report revealed that OPEC production deviated from expectations in June and increased by 234,000 barrels per day to 28.72 million barrels per day.