IEA: Global demand for oil to rise 7% to 104.7 mln bpd till 2023

MOSCOW, Mar 5 (PRIME) -- Global demand for oil will rise by 7% or 6.9 million barrels per day to 104.7 million barrels per day in 2018-2023 with China and India remaining the major contributors to the growth whose share in the global demand structure will rise to about 50%, the International Energy Agency (IEA) said in an oil market report on Monday.

Russia’s oil and gas condensate production is to grow in the next few years, peak in the early 2020s and then begin to fall due to the sanctions and the industry’s taxation scheme.

The U.S. sanctions against Russia prohibit Western companies from participating in shelf oil production, including equipment and technologies supplies, as well as development of shale fields. They also prohibit companies from investing more than U.S. $1 million in a single payment or more than $5 million a year in construction of Russian export pipelines, providing goods, services, technologies and information support for the construction.

The IEA said that a tax reform in Russia’s oil industry, including the so-called tax maneuver and introduction of an additional income taxation system, could become the key drivers of oil production growth in the long-term.

In 2017, Russia hit a record oil output of nearly 11 million barrels per day despite its participation in a production cut agreement between OPEC and non-OPEC states. Further growth is possible in the next few years if restrictions envisaged by the agreement are lifted and new projects are launched, according to the agency.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement in December 2016 with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was prolonged until the end of 2018 in November 2017.

The IEA said that participants of the OPEC+ agreement are likely to exit the deal in 2019.

It also said that the United States is to raise oil production by 28.7% from 2017 to 17 million barrels per day until 2023 due to the “shale oil revolution” and to cover 60% of the global oil supply, while Venezuela’s output will continue to decline.

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