The mid-term forecast by IEA is segmented by different types of petroleum products made by processing crude oil. The final demand for oil in the period 2022 – 2028 will grow by 6% from 99.8 mln of bbl per day up to 105.8 mln of bbl per day. The absolute increment of the demand will reach 6 mln of bbl per day: with aviation kerosene accounting for 2 mln of bbl per day; naphtha and liquified petroleum gases (LPG) used in petrochemistry – for 3.2 mln of bbl per day; diesel fuel used in overland cargo transportation – for 0.6 mln of bbl per day; and fuel oil used in marine transportation and electricity generation plus all other types of petroleum products except for gasoline (the demand for gasoline will drop by 0.2 mln of bbl per day due to the booming e-vehicles sector – for 0.4 mln of bbl per day.
The growth of demand for aviation kerosene will be mainly of the restorative nature. The COVID-19 pandemic resulted in abrupt shrinkage of aviation operations: according to IEA, the global consumption of aviation kerosene in 2022 was lower than in the pre-COVID 2019 by 1.8 mln of bbl per day. China was the last one of the major consumers to cancel the COVID-related restrictions in aviation operations: starting from January 2023, quarantine will not be required for people entering the country (it will be enough to pass the PCR test 48 hours before the flight). Removal of barriers will contribute to minimising the gap between the current and the pre-crisis consumption: according to the International Aviation Transportation Association (IATA), the effective passenger-kilometres of non-military aviation operations in the APR in April 2023 was by 18.4% below the same indicator in April 2019, and in the world – by 9.5%.
China will remain the driver of the demand for oil in petrochemistry: in this country during the period 2022 – 2028 the demand for naphtha will grow by 1 mln of bbl per day, and for LPG – by 0.5 mln of bbl per day. Commissioning new polymer production capacities will play an important role here: according to Global Data, the share of the PRC is 52% of the capacity or current and planned polypropylene production projects in the APR (polypropylene is the interim feedstock for manufacturing pipes, packaging films and soundproof materials).
India will be the locomotive of the demand for oil in the chartered cargo transport: the diesel fuel consumption in this country will grow by 0.5 mln of bbl per day. The continuing urbanisation will also have an impact, and India (35% in 2021) is just a bit behind China (63% in 2021). The minimisation of this gap will result in the growing need for cargo transportation, which will be impossible to cover exclusively by e-vehicles, as they are just starting their way even in the developed economies.
Overall, the growth of demand for oil in petrochemistry, aviation operations and cargo transportation will “beat’ the reduction of demand in the cars segment. So, the peak of the demand for crude is ahead of us.