World oil demand to grow next year

Offshore staff

CAMBRIDGE, Massachusetts -- World oil demand is set to grow next year for the first time since 2007 and return to pre-recession levels by 2012, according to IHS Cambridge Energy Research Associates (IHS CERA) in its quarterly World Oil Watch report. The rebound would mark a turnaround from the largest drop in global oil demand since the oil crisis of the early 1980s, the company says.

IHS CERA expects oil demand growth to resume by 900,000 b/d in 2010 and return to its 2007 high of 86.5 MMbbl/d by 2012—a five year turnaround.

Oil demand dropped by 2.8 MMbbl/d from its high point of 86.5 MMbbl/d in 2007 to 83.8 MMbbl/d in 2009. The last time that the world experienced such a severe decline in oil consumption was in the early 1980s and it took nine years for demand to return to the 1979 pre-recession high, according to the report.

The key differences between the current recovery and that of the 1980s are demand from emerging markets and fewer options for substituting fuels on a global scale, says IHS CERA.

Overall, emerging markets will drive the recovery of oil demand. IHS CERA expects oil demand to increase from 83.8 MMbbl/d in 2009 to 89.1 MMbbl/d in 2014. 83 percent (4.4 MMbbl/d) will come from non-OECD countries. China alone is expected to account for 1.6 MMbbl/d of cumulative growth. Just 900,000 b/d of growth is expected to come from OECD countries.

09/08/2009