Page 151 - RusRPTApr23

swinging into deficit during the second half of the year when China is expected to drive world oil demand to record levels, according to the IEA latest monthly Oil Market Report. The current lacklustre demand has resulted in global oil stocks building to their highest levels in 18 months. Much of the supply overhang reflects a trend of ample Russian supplies racing to re-route to new destinations in response to the full force of EU embargoes. The IEA report notes that building up oil stocks today will help ease tensions later in the year, since global demand is set to surge by 3.2mn barrels a day between the first and fourth quarters, taking average annual growth to 2mn barrels a day.
Global oil markets are contending with a surplus as Russian production defies predictions of a slump while fuel demand slowly picks up, the International Energy Agency said. Oil stockpiles have climbed to the highest in 18 months, with Russia managing to increase output last month despite warnings it would buckle under international sanctions, the Paris-based IEA said in its monthly report. Demand growth, while set to pick up, remains subdued amid lingering fears of recession.
The IEA said it now expects Russian oil production to stand at 10.4mn barrels a day this year, 300,000 barrels a day more than it was forecasting last month, but still 740,000 barrels a day less than in 2022. Russia has largely managed to maintain its production levels as it has sought out alternative customers, particularly in India and China.
The IEA also noted that, in seeking customers further afield, Russian ships were faced with longer journey times, which currently average close to 22 days from its Eastern ports and roughly 24 from its Western ports, compared to journey times of roughly 10 days and 15 days, respectively, in January 2022.
Russia has also turned to ship-to-ship transfers operations--in which oil is pumped between vessels at sea, often in sheltered waters in the Mediterranean--in order to help moved cargoes longer distances. Such ship-to-ship transfers had risen significantly, the IEA said, to around 180 in January, roughly double the average level in 2021.
In the same report, the IEA leaves its forecasts for global oil demand and supply this year mostly unchanged. It said it still expects demand to grow by 2mn barrels a day this year, largely as a result of China's economy recovering following an end to Covid-19 lockdown measures.
The IEA expects total demand this year to stand at 102mn barrels a day, 100,000 barrels a day more than it was forecasting last month. Oil supplies are expected to struggle to keep pace with oil demand, threatening to push the oil market into a supply deficit in the second half of the year, the IEA said.
The IEA said it expects total oil supplies of 101.6mn barrels a day this year, 300,000 barrels a day more than its forecast last month, but still behind
151 RUSSIA Country Report Russia April 2023 www.intellinews.com