An official report indicates that this year will see a halving in oil demand, impacting both Vladimir Putin’s war-driven economy and Saudi Arabia, the world’s top oil producer.
According to the International Energy Agency’s latest report, factors such as weakening global economies and a shift towards more energy-efficient practices are expected to reduce crude oil demand from 2.3 million barrels per day (mb/d) in 2023 to just 1.2mb/d this year.
Concurrently, the global oil supply is projected to reach an unprecedented level of 103.5mb/d this year, driven by increased production in the United States, Brazil, Guyana, and Canada.
This situation could lead to a decrease in the price of Brent crude, the global benchmark, which has already fallen approximately 20% since late September to around $78 per barrel.
Russia, which depends on oil revenues to support its military actions in Ukraine, had planned to reduce supply in coordination with OPEC, the consortium of oil-producing nations, to maintain higher prices.
Despite these efforts, the IEA reported that Russian oil exports increased by 500,000 b/d, reaching a nine-month peak of 7.8mb/d in December.
