China accounts for 70% of oil demand growth in 2023

In this interview given to Naser El Tibi, from Al Arabiya News Channel, Dr. Carole Nakhle, CEO of Crystol Energy, discusses the latest dynamics in oil markets.

Dr Carole Nakhle discusses the latest oil market developments with Naser El Tibi from Al Arabiya News Channel

Key takeaways:

– The upward pressure in oil prices that we saw in the last few months is the outcome of a combination of OPEC+ cuts, increased demand for oil in the holidays season, a more optimistic (yet still cautious) macroeconomic outlook, in addition to the continuation of geopolitical tensions.

– According to the IEA, China is expected to account for 70% of global oil demand this year. It is therefore not surprising to see that developments in China and its economic performance will have a major impact on demand growth in 2023 (and after).

– The demand for oil cannot be viewed in isolation of the economic performance. 

– China has the second biggest economy after the US, thus its economic slowdown and structural weaknesses are likely to spillover on the global economy as well as the demand for oil. 

– After Joe Biden came into power, the US stance on Iranian oil exports has been more lenient than during the time that Donald Trump was in power. But even when Trump was president and pursued ‘maximum pressure’ on Iran, Iranian oil exports never stopped and were still around 500,000 barrels per day, mostly going to China.

– While a recovery in Iranian oil exports has been witnessed to some extent, they are unlikely to have a major impact on the oil markets as long as sanctions are still in place. 

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