Global oil demand growth forecast sharply lowered
Quick Look
- OPEC Secretary General Haitham Al Ghais said that the average daily global demand for raw materials will increase by 400 thousand barrels against the expected 1.4 million.
- The forecast has been reduced by 3.5 times due to factors preventing the situation from normalizing.
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Why It Matters
The forecast for global oil demand growth has been downgraded amid geopolitical tensions in the Persian Gulf region.
At the end of the year, the average daily global demand for raw materials will increase by 400 thousand barrels against the initially expected 1.4 million. This was stated by the Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Haitham Al Ghais, as quoted by Reuters.
Thus, the forecast was lowered by 3.5 times. The industry organization, he explained, expects that the growth rate of global oil consumption will begin to recover no earlier than next year due to pent-up demand.
Currently, there are a number of factors that hinder the rapid normalization of the situation. Among the main ones, experts include the protracted blockage of the Strait of Hormuz, as well as the increasing attacks by Iran and the Yemeni Houthi rebels on the energy infrastructure of the Persian Gulf countries. Against this background, analysts at the investment bank Goldman Sachs significantly increased their forecast for the average price of Brent at the end of the year.
Open Questions
- When exactly will global oil consumption recover?
- What additional measures will OPEC take?
