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The head of Vitol, the world's largest energy trader, is joining Aramco's CEO in seeing 2022 as a bullish year for oil demand.
The global energy trader’s chief executive sees oil demand in 2022 outpacing the pre-pandemic levels of 2019, with energy prices likely to remain elevated for some time.
“Twelve months ago, the worst horrors of COVID appeared to be over. As life in many societies began to get back to normal, so oil demand rebounded, with all products apart from jet fuel seeing strong growth,” CEO Russell Hardy said in a statement on Monday on the group’s 2021 results.
Hardy's comments come a day after Amin Nasser, CEO of Aramco, stating similar outlook. Nasser told reporters following the company's annual results that he sees oil demand exceeding 100 million barrels per day this year while supply is lagging behind.
“Whilst we anticipate oil demand falling in the long term, demand is likely to continue to grow for the next decade. Given limited investment in production, we expect a ‘demand gap’ to widen over the next few years,” Hardy said.
Vitol said its revenue leapt to $279 billion in 2021, from $140 billion in 2020, and it delivered 7.6 million barrels a day (mbpd) of crude oil and products last year compared with 7.1 mbpd in 2020.
Hardy said rising oil demand coupled with restrained growth in production caused stocks to draw 2 mbpd to multi-year lows, adding that physical energy markets were already tight before the Russia-Ukraine crisis.
Earlier this month, oil prices soared to their highest level since 2008 as the United States and European allies discussed a Russian oil import ban over the invasion of Ukraine, raising tight supply fears.
Gas and power markets experienced unprecedented volatility in the early European autumn and December due to fears of shortages, brought about by an unseasonably cold and late spring and subsequent failure to replenish European stocks over the summer, Hardy said.
(with input from Reuters)