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OPEC Expects Global Oil Demand to Surpass Pre-pandemic Level

A rig, and in the background appears the logo of OPEC. (Reuters)
A rig, and in the background appears the logo of OPEC. (Reuters)
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OPEC Expects Global Oil Demand to Surpass Pre-pandemic Level

A rig, and in the background appears the logo of OPEC. (Reuters)
A rig, and in the background appears the logo of OPEC. (Reuters)

OPEC on Tuesday stuck to its forecasts for robust growth in global oil demand in 2023 and 2024 citing signs that major economies are faring better than expected despite headwinds.

World oil demand will rise by 2.25 million barrels per day (bpd) in 2024, compared with growth of 2.44 million bpd in 2023, the Organization of the Petroleum Exporting Countries said in a monthly report.

Both forecasts were unchanged from last month.

A lifting of pandemic lockdowns in China has helped oil demand rise in 2023. OPEC has maintained a relatively upbeat view on 2024, seeing stronger demand growth than other forecasters such as the International Energy Agency.

The ongoing global economic growth is forecast to drive oil demand, especially given the recovery in tourism, and air travel, OPEC said in the report.

"Pre-COVID-19 levels of total global oil demand will be surpassed in 2023."

Oil demand collapsed in 2020. OPEC has been consistently saying it would recover and said in the report demand would average 102.1 million bpd in 2023, above the pre-pandemic rate during 2019.

OPEC and its allies, known as OPEC+, began limiting supplies in 2022 to bolster the market. Global benchmark Brent crude breached $90 a barrel last week for the first time in 2023 after Saudi Arabia and Russia extended voluntary cuts until the end of the year.

Brent crude prices rose as high as $91.82 a barrel after the report was released, hitting a fresh 2023 high.

OPEC held its forecast for world economic growth this year at 2.7% and kept next year's figure at 2.6% citing a resilient first half and a steady global growth trend that had continued into the third quarter.

"Emerging Asia, particularly India, Brazil, and Russia, could further surprise to the upside," OPEC said.

"Moreover, if the US continues to keep its current momentum, growth could turn out to be higher than expected."

The OPEC report also showed OPEC oil production rose in August driven by a recovery in Iran's production despite US sanctions remaining in place on Tehran and Saudi Arabia's voluntary cuts, as well as an increase in Nigeria.

OPEC output rose by 113,000 bpd in August to 27.45 million bpd, the report said.

US crude inventories are expected to fall by about 2 million barrels in the week ending on September 8, a preliminary Reuters poll showed on Monday.

The European Central Bank is also expected to announce its interest rate decision on Thursday.

On Monday, the European Commission forecast the eurozone to grow more slowly than previously expected in 2023 and 2024.

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Saudi Arabia Leads Global Efforts Against Desertification at COP16

Saudi Arabia establishes principles for combating desertification and drought (SPA)
Saudi Arabia establishes principles for combating desertification and drought (SPA)
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Saudi Arabia Leads Global Efforts Against Desertification at COP16

Saudi Arabia establishes principles for combating desertification and drought (SPA)
Saudi Arabia establishes principles for combating desertification and drought (SPA)

Saudi Arabia is leading international efforts to address desertification and its negative impacts on economies, societies, and environments worldwide. This initiative comes as the Kingdom prepares to host the 16th Conference of the Parties to the United Nations Convention to Combat Desertification (COP16).

To support sustainable development goals, Saudi Arabia sent a high-level delegation to the 79th United Nations General Assembly, led by Foreign Minister Prince Faisal bin Farhan Al Saud.

This delegation launched a significant initiative involving the upcoming three COP conferences on climate change, biodiversity, and desertification.

The aim is to create comprehensive solutions that enhance the outcomes of these agreements, which have been working for 30 years to improve life on Earth and ensure the sustainability of natural resources.

Speaking to Asharq Al-Awsat, Dr. Osama Ibrahim Faqeeha, Deputy Minister of Environment, Water, and Agriculture in Saudi Arabia and advisor to COP16, emphasized that recent meetings are part of ongoing efforts that began when Saudi Arabia announced it would host one of the largest global environmental conferences.

This decision highlights the international community’s trust in the Kingdom’s leadership on these critical issues, according to Faqeeha.

The deputy minister also mentioned Saudi Arabia’s recent call to governments at the United Nations General Assembly, urging them to take decisive action at COP16 of the United Nations Convention to Combat Desertification, which will be held in Riyadh in early December.

Saudi Arabia’s Preparations for COP16

As COP16 approaches, Saudi Arabia is taking on a crucial role at both regional and international levels to host the conference.

Faqeeha noted that the Kingdom has launched the “Middle East Green Initiative,” a unique coalition designed to address climate change through regional cooperation.

This initiative aims to create a sustainable future by diversifying the economy, generating jobs, and attracting private sector investments.

It focuses on two main goals: increasing tree planting and reducing carbon emissions in the region.

Additionally, Saudi Arabia is establishing regional centers and programs to help achieve these objectives and promote investments in the circular carbon economy and reforestation efforts.

Faqeeha highlighted that Saudi Arabia’s efforts have earned global trust, making it the ideal host for COP16.

He pointed out that during its G20 presidency, the Kingdom launched an initiative, aiming to unify global efforts for innovative solutions in land restoration and drought resilience.

This initiative is vital for food and water security, especially as a quarter of the world's population faces drought conditions, with projections suggesting that three out of four people may experience water scarcity by 2050.

In terms of preparations for COP16, Faqeeha noted that the conference will showcase Saudi Arabia’s dedication to tackling climate change and finding effective solutions for land degradation.

The Kingdom has implemented proactive measures and revised environmental laws to reaffirm its commitment to international agreements.

“We have worked hard to bring together the world’s best minds and resources in Riyadh to pave the way for a sustainable future,” Faqeeha told Asharq Al-Awsat.

As part of the preparations for this 30th anniversary of the UN Convention to Combat Desertification, Faqeeha said: “We will present evidence to delegations showing that significant financial returns are possible for the global community, along with real benefits for society, in line with global development goals.”