OPEC sticks to its expectations that demand for oil will exceed pre-pandemic levels this year

OPEC maintained its forecast that global oil demand will exceed pre-coronavirus levels in 2022, but said that the Russian invasion of Ukraine and pandemic developments pose a significant risk.

In a monthly report released on Tuesday, the Organization of the Petroleum Exporting Countries stuck to its forecast that global oil demand would rise by 3.36 million barrels per day in 2022, continuing its recovery after a sharp decline in 2020.

The war in Ukraine pushed the oil price to rise above $139 a barrel in March, its highest level since 2008, adding to inflationary pressures. In addition, restrictions imposed to contain a new spread of Covid-19 in China have reduced the oil demand.

“Looking ahead, current geopolitical developments and the uncertain roll-out of the pandemic toward the end of the second half of the year continue to pose a considerable risk to the forecast recovery to pre-pandemic levels,” OPEC said in the report.

“Inflationary pressures are likely to persist and it remains highly uncertain as to when geopolitical issues may be resolved. Nevertheless, oil demand is forecast at healthy levels in the second half of this year.”