IEA trims 2023 oil demand forecast on economic headwinds

LONDON (Reuters) – Oil demand is set to hit a record high this year but economic headwinds and interest rate hikes mean the increase will be slightly less than anticipated, the International Energy Agency (IEA) said on Thursday.

While demand is expected to reach 102.1 million barrels per day (bpd), the Paris-based energy watchdog lowered its forecast for growth of the first time this year, by 220,000 barrels per day (bpd), to 2.2 million bpd.

“World oil demand is coming under pressure from the challenging economic environment, not least because of the dramatic tightening of monetary policy in many advanced and developing countries,” the IEA said in its monthly oil report.

China is due to make up more than two-thirds of this year’s demand growth as its post-pandemic economic rebound is set to gain pace, especially later in the year, the IEA said, adding that demand in developed countries and especially Europe remains subdued.

Oil demand growth is set to halve next year to 1.1 million bpd, the IEA said, reflecting vehicle electrification and energy efficiency.

(Reporting by Noah Browning; editing by Jason Neely)