RIYADH: The oil market is on track to reach balanced levels between supply and demand in 2023, King Abdullah Petroleum Studies and Research Center expert Colin Ward said in an exclusive interview with Arab News.
During 2023, oil supply is projected to surge 2.7 million barrels per day while demand is expected to increase by 1.8 million bpd, the research expert disclosed.
“We're going to see a market that pretty much hit some form of balance,” Ward told Arab News on the sidelines of the International Association for Energy Economics conference in Riyadh.
Despite this, the KAPSARC expert noted that many unprecedented events could consequently alter demand figures such as whether or not there is a recession coming.
In addition to this, China’s reopening also poses a factor that could impact the demand for oil, Ward revealed.
“We're already seeing indications that their demand for jet fuel is going up significantly because people are traveling a lot more,” he explained.
Speaking on the supply side, Ward reveals that the conflict between Russia and Ukraine as well as the behavior of the Organization of the Petroleum Exporting Countries and other key market players could potentially influence supply figures.
“If we are worried that the price cap is going to somehow have pushed back to where Russia may not wish to provide as much oil to the market, the 2 million barrels that OPEC pulled off is acting as a supply buffer, which means that it could come back online,” he exposed.
In response to the price cap, people have been stocking up in order to assure that supplies are going to last, the KAPSARC expert pointed out.
“Going forward, there's going to be a period of probably a month or two where the logistics of delivering oil from sources to the consumers are going to take some time to get sorted out,” the researcher highlighted.
“We expect that there's probably going to be an increase in fuels being produced by some nations like China, India, perhaps Turkey or some others who would be able to supply the global market with these fuels,” he added.
The 44th IAEE International Conference is being held in the Saudi capital from Feb. 4 to 9, in what is a first for the Middle East and North African Region.
The event’s theme is “Pathways to a clean, stable, and sustainable energy future”, and is being hosted by KAPSARC and Saudi Association for Energy Economics.
More than 500 delegates from 40 countries are anticipated to attend the conference, with topics set to be discussed including energy, economic development, and climate change, the Circular Carbon Economy, and the role of hydrogen in the energy transition.
The IAEE is a global non-profit organization formed in the US in 1977 and works to promote dialogue and the exchange of ideas around the economic analysis of energy resources.
