IEA notes sustainability of Russian oil exports

Global oil demand in 2023 will grow by 2 million barrels per day (b / d) compared to 2022 – to a record 102 million b / d, follows from the updated forecast of the March report of the International Energy Agency (IEA). Experts expect that after a reduction in consumption by 80 thousand b/d in the fourth quarter of 2022, demand growth will accelerate further during 2023, from 710 thousand b/d in the first quarter to 2.6 million b/d in the fourth. According to IEA forecasts, the Asia-Pacific region will show the best dynamics this year due to the recovery of China after the end of “zero tolerance”.

World oil supply in 2023 may grow less than demand by 1.6 million b/d, due to non-OPEC+ countries, the report says. At the same time, in the first half of the year, the supply of oil on the market will exceed demand (see chart), but the situation will change in the second half of 2023, by the end of the year, the oil shortage may amount to 0.4 million bpd. From the IEA report, it follows that the industrial stocks of oil and petroleum products in the OECD in January increased to 2.85 billion barrels – and this is the maximum since July 2021. According to preliminary data, the growth of inventories continued in February.

For Russian production in 2023, the forecasts in the March report of the IEA have been increased: experts expect it to be at the level of 10.35 million b/d, which is 300 thousand b/d more than forecasted in February. The IEA explains the improvement in estimates by fairly stable Russian exports: the measures taken to redirect oil to new markets allowed the Russian Federation, as the report says, “surprisingly well” to maintain supplies after the start of the military operation. According to the agency, after a February increase of 130 thousand b/d, to 9.91 million b/d in March, oil production in the Russian Federation will be reduced to 9.4 million b/d, which is associated with the announced voluntary reduction in production in March by 500 thousand b/s. Earlier, Deputy Prime Minister of the Russian Federation Alexander Novak explained the decision to limit production by the desire to “restore market relations.”

The export of oil and oil products from the Russian Federation in February, after the entry into force of the second stage of the EU embargo, decreased in total by 500 thousand b/d, to 7.5 million b/d, the IEA notes. Oil exports fell by 200,000 bpd to 4.9 million bpd (down 3.9% on January), exports of petroleum products fell by 500,000 bpd to 2.6 million bpd s (by 16% against January).

Christina Borovikova