Global demand for oil products other than jet fuel made a full recovery to pre-crisis levels in the third quarter of this year, thanks to the strong recovery of oil demand outside the aviation sector, data and analytics company GlobalData said on Thursday.
Global demand for kerosene, primarily used for jet fuel, has been at around two-thirds of pre-COVID levels throughout this year.
Including kerosene demand, total oil product demand was 3 percent below pre-COVID levels in the third quarter, GlobalData said.
Strong Chinese demand for gasoline, naphtha, and LPG has led the global recovery in oil demand so far this year, according to the analytics firm.
“Other major economies are still yet to see demand fully recover to pre-COVID-19 levels, but the strength of China’s growth plugs the gap. Still, the depressed aviation sector means a significant global demand shortfall, leaving open the prospect that we may have already seen peak oil demand — given the acceleration of energy transition to renewables,” said Will Scargill, Managing Energy Analyst at GlobalData.
Jet fuel demand was hit the worst since the start of the pandemic amid bans on international travel and quarantine requirements. Analysts have said that oil demand from the aviation sector will likely take until 2023 to fully recover to pre-COVID levels.
Recent travel restrictions in the wake of the Omicron variant will likely stall the recovery in jet fuel demand in the fourth quarter of this year, according to GlobalData.
Despite the lagging recovery of aviation fuel demand, major forecasters expect total annual global oil demand to reach pre-crisis levels next year.
Although the International Energy Agency revised down by 100,000 bpd its oil demand growth forecasts for this year and next earlier this week, the IEA expects oil demand to rise by 5.4 million bpd compared to 2020, and another 3.3 million bpd in 2022, reaching the pre-COVID levels of 99.5 million bpd.
OPEC also sees total oil demand back to pre-crisis levels in 2022, expecting a “mild and short-lived” impact of Omicron on overall consumption.
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By Tsvetana Paraskova for Oilprice.com
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