Global oil consumption continues to surge, surpassing expectations yet again this year and prompting speculation about when demand will eventually peak. Amin Nasser, CEO of Saudi Aramco, emphasized the importance of realistic investment in oil and gas, dismissing the notion of phasing them out. Russell Hardy, CEO of Vitol SA, echoed the sentiment, revising their estimate for peak oil consumption to the early 2030s due to lower expectations for electric vehicle adoption.
The International Energy Agency (IEA) predicts a 1.3 million barrel per day increase in oil demand for 2024, attributing it to factors such as a strong US economy and shipping diversions avoiding the Suez Canal. However, some industry insiders believe the IEA’s forecasts are too conservative, with expectations from companies like Gunvor Group and Trafigura exceeding IEA projections.
Trafigura’s chief economist, Saad Rahim, highlighted the unexpectedly robust performance of the US economy as a key factor driving oil demand. This surge in consumption has led to a rally in oil prices, with Brent crude futures rising by 11% this year, reaching over $87 a barrel at one point.
As reported by Bloomberg, various sectors, including shipping, jet fuel, and plastics, are driving demand growth, with India expected to become a significant contributor in the coming years. As the third-largest oil importer globally, India’s projected 7% economic growth in the upcoming fiscal year positions it as a major source of demand growth, according to the IEA.
