Demand for oil is more likely to hit new heights this yr, after consumption of the fossil gas reached a report excessive in June, in response to the Worldwide Vitality Company (IEA).

The IEA’s newest oil market report printed Friday notes that oil demand hit a report 103 million barrels a day in June, pushed by better-than-expected financial progress in wealthy nations, summer time air journey and surging demand for the fossil gas in China, notably for petrochemical manufacturing.

Because of this, the influential group stated it expects world oil demand to hit a median of 102.2 million barrels a day in 2023, which might be the best annual degree.

China alone, the place COVID-19 restrictions have lastly begun to be eased over the previous yr, is about to account for 70 % of the expansion in anticipated oil demand in 2023, it stated.

Nonetheless, whereas oil demand continues to be rising, progress is about to decelerate subsequent yr because the clear vitality transition gathers tempo and the worldwide financial restoration from the pandemic peters out, the IEA careworn.

It predicted components akin to tighter vitality effectivity requirements and the continuing rise of electrical automobiles would serve to greater than halve oil demand progress from 2.2 million barrels a day in 2023 to 1 million barrels a day subsequent yr.

“With the post-pandemic restoration having largely run its course and because the vitality transition gathers tempo, progress will sluggish to 1 million barrel a day in 2024,” it stated.

The IEA’s findings echo latest predictions made by vitality analyst Wooden Mackenzie, which contended in a report printed in July that oil demand would proceed to develop all through the 2020s, earlier than peaking within the 2030s when electrical automobiles (EVs) start to considerably eat away at fossil gas demand. The analyst predicted that whereas the speed of progress in demand will begin to sluggish from 2024 onwards, consumption won’t fall till subsequent decade.

Elsewhere in its oil market replace, the IEA famous that world stockpiles of oil are thinning after Saudi Arabia and Russia have made cuts in provide, in a transfer designed to shore up costs for the fossil gas. The oil report predicts that output from OPEC+ international locations may fall to a two-year low in 2023.

Provide from international locations that sit outdoors the OPEC+ bloc is predicted to dominate world provide progress subsequent yr, it predicts, with the U.S. anticipated to make up 80 % of world 2023 provide progress, or 1.2 million barrels a day.