IEA: Oil Demand Set to Exceed Pre-pandemic Levels in 2022

IEA: Oil Demand Set to Exceed Pre-pandemic Levels in 2022

File photo: A general view of a refinery in Hobbs, New Mexico, US September 18, 2019. REUTERS/Adria Malcolm

Oil demand is set to rise above pre-pandemic levels by the end of next year, the IEA said Friday, but producers have sufficient capacity rise to the challenge.

In its first detailed look at next year in its regular monthly review of the oil market, the International Energy Agency sees a gradual return of demand as vaccine distribution widens and economic activity returns to normal in many countries and sectors.

"By end-2022, demand should surpass pre-Covid levels," APF quoted it as saying.

Oil demand tanked by a record 8.6 million barrels per day (mbd) last year as countries shut down swathes of their economies as the coronavirus spread around the world.

The IEA expects it to rebound by 5.4 mbd this year and a further 3.1 mbd next year.

However, the Paris-based agency that advises oil-consuming nations warned that "the recovery will be uneven not only amongst regions but across sectors and products."

Demand is expected to recover faster in wealthy nations with earlier access to vaccines, while some sectors like aviation lag as some travel restrictions remain in place and more people work from home than before.

"A widespread