Oil demand to return to pre-pandemic levels in 2023
With the global economy recovering from the COVID-19 pandemic, the International Energy Agency (IEA) has forecast world oil demand will surpass pre-pandemic levels by next year, and supply could struggle to keep pace with demand.
In its latest oil market report, the IEA forecasts global oil demand to reach 101.6 million barrels per day (bpd) in 2023, with growth of 1.8 million bpd in 2022 and an additional 2.2 million bpd of demand anticipated in 2023.
A forecast rise in world oil supply through the end of 2022 is anticipated to help rebalance oil markets but could be short lived as tougher sanctions on Russia come into full force and oil demand in China recovers from the COVID-19 lockdowns seen earlier this year.
These factors could see supply struggle to keep pace with demand in 2023, with the IEA warning OPEC+ could need to dip further into its dwindling capacity cushion, reducing it to historic lows of just 1.5 million bpd.
With demand forecast to continue to rise to new highs, it demonstrates the importance of unlocking new supply.
Meanwhile, Australia’s deficit between supply and demand continues to rise, which is why the development of new discoveries such as Dorado and Pavo in the Bedout basin are so important.
With Carnarvon holding more than 100 additional exploration targets in the Bedout, further exploration will be vital to further bolster Australia’s energy security.
Carnarvon’s renewable fuels business, FutureEnergy Australia (FEA), will also play a role in further bolstering Australia’s domestic energy supply, while simultaneously playing a role in helping the nation reach its emission reduction targets.
FEA is proposing to build Australia’s first commercial scale renewable diesel production facility in the Shire of Narrogin in Western Australia.
The Narrogin facility will produce an initial 18 million litres of renewable diesel per annum, but Carnarvon’s overall vision is to be producing about 500 million litres per annum from several such facilities by the end of the decade.