Most of the world is vaccinating itself and reopening, boosting expectations that growing economies would help trigger a bump in oil demand that was viscerally hit last year, but India – one of the world’s biggest importers – remains a cause of concern.
The Organization of Oil Producing Countries (OPEC) said earlier this week that it expects global oil demand to grow by 6 mb/d to around 96.5 mb/d on average for the year, an increase of 6.6% this year as economies open up – sounding optimism that the second half of the year is likely to further boost demand.
In fact, Mohammad Sanusi Barkindo, OPEC Secretary General, told the 30th Meeting of the Joint Ministerial Monitoring Committee that OPEC was anticipating demand to surpass 99 mb/d in the fourth quarter – back in the range of the pre-pandemic level.
He said the demand will be pulled by the Chinese and the U.S. economies – both expected to expand. The Indian economy, he said, was likely to grow by 9.7% despite a second wave of the pandemic that again shut most parts of the vast country in April and May, sharply hitting demand.
However, there is a view that it is a bit early to predict both an economic growth of just about 10% and a surge in demand for oil as many parts of the country are still witnessing localised shutdowns and logistics and supply chains still continue to be impacted. The two biggest cities – New Delhi and Mumbai – only start reopening partially from Monday.