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Dec 14, 2021 - Energy & Environment

Omicron won't reverse oil demand recovery, IEA says

Ben Geman
GIF of an oil barrel moving back and forth.

Illustration: Aïda Amer/Axios

The International Energy Agency said that rising COVID cases are likely to "temporarily slow, but not upend" the global oil demand recovery.

Driving the news: The agency's closely watched monthly analysis this morning slightly cut demand growth estimates for this year and 2022, but overall said:

  • "New containment measures put in place to halt the spread of the virus are likely to have a more muted impact on the economy versus previous COVID waves, not least because of widespread vaccination campaigns."

By the numbers: The IEA now sees global demand this year at 5.4 million barrels per day (mbd) above 2020's COVID-battered levels, and rising another 3.3 mbd next year to reach pre-pandemic levels.

  • Both tallies are 100,000 barrels per day less than prior projections.

The big picture: Overall, IEA continues to see a softening supply-demand balance heading into next year as production growth comes from the U.S., Canada, Brazil and OPEC+.

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