Saudi Aramco sees oil demand close to pre-pandemic levels

Reema Alothman and Matthew Martin 01/24/2022

(Bloomberg) – Saudi Aramco said oil demand was approaching pre-Covid levels and reiterated that producers around the world were investing too little in supply.

“We are approaching pre-pandemic levels,” chief executive Amin Nasser told reporters in Dhahran, where the world’s largest oil company is based, on Monday. “We continue to see healthy demand going forward.”

Crude consumption fell by about 100 million barrels a day in early 2020 as the coronavirus pandemic spread, shuttering factories and triggering mass shutdowns. The International Energy Agency, which advises rich countries, said it had returned to nearly 98 million barrels a day in September.

Oil prices have jumped 13% this year to over $85 a barrel as demand continues to recover and the omicron variant of the virus proves less economically damaging than many traders initially feared. . At the same time, spare supply capacity is shrinking as several large producers struggle to increase production.

There is no evidence yet that rising prices are forcing consumers to reduce their oil consumption, Nasser said.

He and Saudi officials have previously warned that crude could soar even higher if Western governments and energy companies pull back from fossil fuels too quickly.

The Persian Gulf countries are among the few still spending billions of dollars to increase production. Saudi Arabia plans to increase its daily crude production capacity to 13 million barrels from 12 million by 2027.

Nasser also said Aramco would continue to consider asset sales regardless of the price of oil. The company accelerated its plans to divest non-core assets when crude crashed with the outbreak of the virus. Last year, it sold lease rights on its oil and gas pipelines to investors including BlackRock Inc. for about $28 billion.

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Felix J. Dixon