Released June 21, 2021 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Global oil demand is set to bounce back stronger than ever by next year according to the International Energy Agency (IEA).
Oil demand will surpass pre-pandemic levels by the end of 2022 as the continued rollout of COVID-19 vaccines allows economic activity to ramp up. Global oil demand will rise by 5.4 million barrels per day (BBL/d) of oil in 2021 and a further 3.1 million BBL/d next year. In 2020, the sector recorded a record decline of 8.6 million BBL/d. The OECD accounts for 1.3 million BBL/d of 2022 growth while non-OECD countries contribute 1.8 million BBL/d. Jet fuel and kerosene demand will see the largest increase of 1.5 million BBL/d year-on-year, followed by gasoline with 660,000 BBL/d and and gasoil/diesel up 520,000 BBL/d.
The recovery in global refinery throughput in 2021 will be less dramatic, but this year is expected to recover half of the 7.4 million BBL/d fall recorded in 2020, lagging behind demand growth for refined products as surplus inventories are drawn down. In 2022, refining activity is forecast to increase by 2.4 million BBL/d. Over the next year, 3.8 million BBL/d of new capacity coming online will be partially offset by 2.3 million BBL/d of announced closures or conversions to bio-refineries.
The refining sector is expected to remain under pressure, the IEA concluded, with demand for refined products in 2022 to remain below 2017 levels. Following net capacity additions of 3.3 million BBL/d over the 2017-20 period, a further 1.5 million BBL/d of new net crude distillation capacity will come online in 2021-22. This means that global average utilisation rates will reach 78%, limiting any rebound in refinery margins from the depressed 2020-21 levels.
Click on the image at right to view refinery margins since 2006 for three global hubs.
"The recovery will be uneven not only amongst regions but across sectors and products," the IEA stated in its latest Oil Market Report. "While the end of the pandemic is in sight in advanced economies, slow vaccine distribution could still jeopardise the recovery in non-OECD countries. The aviation sector will be the slowest to recover as some travel restrictions are likely to stay in place until the pandemic is brought firmly under control. Gasoline demand is also expected to lag pre-COVID levels, as continued teleworking practices and a rising share of electric and more efficient vehicles provide an offset to increased mobility. Petrochemicals will be boosted by robust demand for plastics, while global trade supports bunker demand."
In March, Industrial Info reported on what the IEA called the refining industry's "third wave of consolidation", citing an increase in closures as newer, more efficient refineries are brought online as well as falling margins amid an uncertain future demand picture for transportation fuels. For additional information, see March 18, 2021, article--IEA: Pandemic Accelerating Global Refinery Rationalization.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Oil demand will surpass pre-pandemic levels by the end of 2022 as the continued rollout of COVID-19 vaccines allows economic activity to ramp up. Global oil demand will rise by 5.4 million barrels per day (BBL/d) of oil in 2021 and a further 3.1 million BBL/d next year. In 2020, the sector recorded a record decline of 8.6 million BBL/d. The OECD accounts for 1.3 million BBL/d of 2022 growth while non-OECD countries contribute 1.8 million BBL/d. Jet fuel and kerosene demand will see the largest increase of 1.5 million BBL/d year-on-year, followed by gasoline with 660,000 BBL/d and and gasoil/diesel up 520,000 BBL/d.
The recovery in global refinery throughput in 2021 will be less dramatic, but this year is expected to recover half of the 7.4 million BBL/d fall recorded in 2020, lagging behind demand growth for refined products as surplus inventories are drawn down. In 2022, refining activity is forecast to increase by 2.4 million BBL/d. Over the next year, 3.8 million BBL/d of new capacity coming online will be partially offset by 2.3 million BBL/d of announced closures or conversions to bio-refineries.
The refining sector is expected to remain under pressure, the IEA concluded, with demand for refined products in 2022 to remain below 2017 levels. Following net capacity additions of 3.3 million BBL/d over the 2017-20 period, a further 1.5 million BBL/d of new net crude distillation capacity will come online in 2021-22. This means that global average utilisation rates will reach 78%, limiting any rebound in refinery margins from the depressed 2020-21 levels.
"The recovery will be uneven not only amongst regions but across sectors and products," the IEA stated in its latest Oil Market Report. "While the end of the pandemic is in sight in advanced economies, slow vaccine distribution could still jeopardise the recovery in non-OECD countries. The aviation sector will be the slowest to recover as some travel restrictions are likely to stay in place until the pandemic is brought firmly under control. Gasoline demand is also expected to lag pre-COVID levels, as continued teleworking practices and a rising share of electric and more efficient vehicles provide an offset to increased mobility. Petrochemicals will be boosted by robust demand for plastics, while global trade supports bunker demand."
In March, Industrial Info reported on what the IEA called the refining industry's "third wave of consolidation", citing an increase in closures as newer, more efficient refineries are brought online as well as falling margins amid an uncertain future demand picture for transportation fuels. For additional information, see March 18, 2021, article--IEA: Pandemic Accelerating Global Refinery Rationalization.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
