"Global oil demand is set to rise by 1.9 mb/d in 2023, to a record 101.7 mb/d, with nearly half the gain from China following the lifting of its Covid restrictions," the report said.
In addition, the IEA has upgraded its forecast for the global oil production growth in 2022 to 100.1 million barrels per day, and its 2023 production forecast to 101.1 million barrels per day.
"Though modest versus 2022, growth in 2023 will still lift total oil supply to an all-time high of 101.1 mb/d," the IEA added.
The agency stressed that total oil supply in the world amounted to 100.1 million barrels per day in 2022.
OPEC and OECD
IEA indicated that OPEC+ has failed to ensure oil production growth necessary under the alliance's oil output cut deal in December, producing 1.77 million barrels per day less.
"Production from the 19 members bound by quotas decreased by 50 kb/d to 38.33 mb/d last month leaving a gap of 1.77 mb/d between the bloc’s supply and official targets. Due to sanctions, Russia leads those lagging far below quotas, while operational issues and capacity constraints are keeping countries such as Nigeria and Angola well under target," IEA stated.
Meanwhile, the commercial oil stores in the Organization for Economic Co-operation and Development (OECD) increased by 1 million barrels in November month-on-month to 2.779 million barrels, which is by 125.9 million barrels lower than the five-year average.
"OECD industry oil inventories rose for a third consecutive month in November, by 1 mb. At 2 779 mb, they were 37.1 mb above a year ago but 125.9 mb below their five-year average," the report read.
Russia and Ineffective Sanctions
The report by IAE states that Western sanctions had little effect on Russian oil industry.
The production of crude oil and condensates in Russia decreased by 30,000 barrels per day in December and reached 11.21 million barrels per day.
"Despite the EU import ban and G7 price cap, Russian production merely dipped 30 kb/d in December. Crude oil exports fell due to the newly imposed sanctions but Russia raised refinery throughput and appeared to have stored significant volumes to keep the taps open. Crude oil supply accounted for all the loss, easing to 9.77 mb/d in December – taking total output of crude oil, condensates and NGLs to 11.2 mb/d," the report claims.
An oil pumping station of the Tatneft company in the Almetyevsk region in Tatarstan.
© Sputnik / Maxim Bogodvid
/ On December 5, a price cap on Russian oil came into effect. The controversial step was adopted by the G7 nations, the EU and Australia, setting the maximum price at $60 per barrel. Russian Deputy Prime Minister Alexander Novak characterized the price cap as an “unprecedented intervention” in free market principles, and pointed out that such a politicization of the energy sphere can only lead to a shortage of resources on the market.
Russia has repeatedly stressed that it would simply stop supplying hydrocarbons to the countries that adopted a price cap. Meanwhile, Moscow boosted its exports to Asia, became top oil supplier for India (replacing Iraq). India, being the world's third-largest consumer, bought 21 percent of its hydrocarbon imports from Russia.