The International Energy Agency (IEA) has indicated in its latest report that global demand for crude oil continues to lose fuel despite the fact that in the first quarter of this year 2024 it has increased by 1.6 million barrels per day, 120,000 less than expected. . initially. The cause is due, above all, to the downward trend of the richest countries.
For the whole of 2024, the increase will be 1.2 million barrels per day, a figure that will decrease slightly to 1.1 million in 2025, although the recovery of activity after the coronavirus pandemic is considered “essentially over,” it states. the IEA in its report. This brake is due to the “exceptionally weak” demand from OECD countries, which has only increased by 250,000 barrels per day in the first quarter, especially in Europe, while in the United States and Canada there were slight increases.
The IEA attributes this situation to the lower demand of the European industry, as well as the greater efficiency of vehicles and the progressive increase in the fleet of electric vehicles. The document highlights the rise in prices, with Brent surpassing $90 per barrel in early April (its highest level in six months) due to increased geopolitical risks, including conflicts in the Middle East and Ukrainian attacks. . with drones against Russian oil infrastructure.
This is a year-on-year increase of 13 dollars per barrel, a trend that the report also attributes to the decision that OPEC and its allies (OPEC+) took in March to extend their production cuts until June, in addition to the more positive forecasts. . of those expected regarding the evolution of the global economy.
OPEC+ cuts
Regarding supply, and given the prolongation of OPEC+ cuts, producers outside of that organization, especially the United States, Brazil, Guyana and Canada, continue to be the ones leading the increase in production, which will be 770,000 barrels per day until a total of 102.9 million.
The production of OPEC+ members will fall by 820,000 barrels per day this year, while that of non-member countries will rise by 1.6 million days. Together, OPEC+ countries have withdrawn nearly two million barrels a day from the market since the end of 2022.
The situation in Russia
Regarding Russia, allied with OPEC and subject to sanctions from Western countries for its invasion of Ukraine, the document indicates that it has committed to cutting its production by an average of 410,000 barrels per day during the second quarter. This cut coincides with a seasonal maintenance phase at the refineries, some of which have also lowered their production after the recent Ukrainian attacks.
The IEA estimates that Russian crude oil production will be 9.1 million barrels per day in the second quarter of this year, which is 0.3 million less than in the first quarter and 0.46 million less than in 2023.
Finally, the IEA monthly report highlights that global inventories of crude oil and derivatives were at their highest level in seven months in February, after increasing by 43.3 million barrels, a phenomenon that is mainly due to storage in ships. “Crude in water” increased by a remarkable 67.8 million barrels, to its highest level in 15 months,” he says, although onshore stocks fell by 24.6 million.
