Outlook for Global Oil Demand in the Post-COVID-19 Era

Abstract

During the COVID-12 pandemic, the global economy and demand fell precipitously. In response to the severe impact of the pandemic, many countries around the world implemented economic stimulus plans to boost their economies, and global financial and oil markets showed recovery. Since 2022, the global economy has been under intensified pressure of recession due to soaring inflation and interest rate hikes. The Russia-Ukraine conflict has further exacerbated the turmoil in financial and oil markets, and the global oil demand recovery process has suffered a blow. In 2022, global oil demand growth slowed down, especially since the summer, oil demand has been paradoxically weak due to high inflation, high oil prices, energy crisis, economic recession, recurring outbreaks of the pandemic and other factors, oil demand showed paradoxically weak performance in the traditional peak season, depressing the market sentiment. Looking ahead, in the fourth quarter of 2022, the European energy crisis, the increase in demand for a substitute for oil, as well as the arrival of winter heating demand, global oil demand is expected to get some boost. The landscape for the global economy in 2023 remains grim but oil demand is expected to grow further as the global pandemic continues to improve. In the medium to long term, with the accelerated pace of global energy transition and the call for carbon emission reduction, traditional energy consumption will be curbed and peak earlier, which poses a huge challenge to the oil market.