The intergovernmental organisation estimates world consumption will drop 0.8 p.c in 2022 and develop 0.4 p.c in 2023.
World pure fuel markets will seemingly stay tight effectively into 2023 as Russia restricts provides and Europe cuts utilization amid excessive costs and vitality saving measures, the Worldwide Power Company (IEA) has mentioned.
World fuel consumption is predicted to drop by 0.8 p.c in 2022 – the results of a document 10 p.c contraction in Europe and static demand within the Asia-Pacific – and develop simply 0.4 p.c subsequent 12 months, the IEA mentioned in its quarterly fuel market report on Monday.
Nonetheless, the market outlook is topic to a “excessive degree of uncertainty” because of Russia’s future actions and the financial impact of excessive vitality costs over time, the IEA mentioned.
“Russia’s invasion of Ukraine and sharp reductions in pure fuel provides to Europe are inflicting vital hurt to customers, companies and full economies – not simply in Europe but additionally in rising and creating economies,” mentioned Keisuke Sadamori, the IEA’s director of vitality markets and safety.
“The outlook for fuel markets stays clouded, not least due to Russia’s reckless and unpredictable conduct, which has shattered its popularity as a dependable provider. However all of the indicators level to markets remaining very tight effectively into 2023.”
Russia’s provide of fuel to Europe has dwindled to a trickle because the shutdown of the Nord Stream 1 final month and the current discovery of leaks within the pipeline.
Moscow has threatened to sanction Ukrainian vitality agency Naftogaz, one of many final remaining Russian fuel provide routes to Europe, a transfer that will exacerbate vitality shortages coming into winter.
Europe has offset the decline in Russian fuel provides by importing LNG and utilizing different pipeline provides from producers akin to Norway.
The IEA mentioned it anticipated Europe’s LNG imports to extend by greater than 60 billion cubic metres this 12 months, conserving the market below stress for the quick to medium time period.
Such a rise might draw imports away from Asia, conserving them decrease than final 12 months for the remainder of 2022, the IEA mentioned.
Nevertheless, China’s new LNG contracts since 2021 and a colder-than-average winter might trigger extra demand from Northeast Asia, the Paris-based intergovernmental organisation mentioned.