IEA: Oil Demand Holds Up Despite Omicron

IEA: Oil Demand Holds Up Despite Omicron

The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo

Oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, the International Energy Agency (IEA) said on Wednesday, while demand holds up despite the spread of the Omicron coronavirus variant.

“This time around, the surge is having a more muted impact on oil use,” the Paris-based IEA said in its monthly oil report.

“The steady rise in supply could see a significant surplus materialize in Q1 2022 and going forward,” it said, with the United States, Canada and Brazil set to pump at all-time highs for the year while Saudi Arabia and Russia could also break their output records.

"World oil supply in 2022 has the potential for a massive Saudi-driven gain of 6.2 million bpd (barrels per day), provided the OPEC+ alliance continues to unwind the remainder of its record 2020 supply cut.”

OPEC and other producers including Russia, a group known as OPEC+, is unwinding record output cuts put in place last year to counter a fall in demand caused by the pandemic.

Its plan calls for adding back 400,000 bpd of production per month to fully unwind