Stocks to watch as IEA lowers oil demand outlook

With Russia being the world’s second-largest oil exporter after Saudi Arabia, there may be large-scale disruptions in the world’s oil supply as a result of sanctions imposed on Russia by Western countries, it said on Tuesday. the International Energy Agency. Ongoing geopolitical tension between Russia and Ukraine threatens to further aggravate already rising global inflation and hurt oil demand and investment.

On Tuesday, the IEA said oil demand growth in 2022 will face challenges from the war between Russia and Ukraine, as it has impacted oil supply and raised prices to their highest records. The Paris-based agency cut the previous forecast for global oil demand growth by 35%, as soaring prices and rising inflation led to reduced prospects for economic growth.

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The agency added that about 3 million barrels per day (bpd) of Russian oil and products may go unsupplied to the global market early next month as economic sanctions bite and buyers delay. which dampens hopes of cooling crude and other products. commodity prices that have pushed inflation to multi-decade highs.

The Paris-based agency cut its growth forecast from 950,000 bpd to 2.1 million bpd for a full-year average of 99.7 million bpd, indicating the third year of lower demand. pre-pandemic levels.

Let’s look at FTSE-listed oil stocks, such as Shell Plc, Vivo Energy Plc and BP Plc, which could be affected by the development.

Shell Plc (LON: SHEL)

The multinational energy and petrochemical company Shell Plc operates in more than 70 countries. Recently, it withdrew from its joint ventures with the Russian state energy company Gazprom. The market capitalization of the FTSE 100-listed company was £147,142.17 million as of March 16, 2022. Shell Plc shares traded at 1,904.60 GBX, down 1.83%, to 11:55 a.m. (GMT), March 16, 2022. The company has returned 25.06% to its shareholders in the past year to March 16, 2022, while its year-to-date return is down. rises to 17.47%.

Vivo Energy Plc (LON: VVO)

The UK-based downstream oil company, with operations in 23 countries across Africa. The company recently announced the resignation of Doug Lafferty as Chief Financial Officer, effective April 30, 2022. It reported a 22% revenue increase to $8,458 million in fiscal 2021 from $6,918 million. million for the 2020 financial year, and declared an additional interim dividend of 4,000 US cents per share, payable on June 24, 2022.

The market capitalization of the FTSE 250-listed company stands at £1,753.45 million as of March 16, 2022. Shares of Vivo Energy Plc traded at 137.20 GBX, down 0.87%, at 11:55 a.m. (GMT), March 16, 2022. The company has returned 46.95% to its shareholders in the past year to March 16, 2022, while its year-to-date return is down. rises to 4.24%.

IEA downgrades oil demand outlook

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BP Plc (LON: BP.)

BP Plc is a multinational oil and gas company, with operations in Europe, Australia, Asia, the Americas and Africa. The company has signed an agreement with Eni to form a new independent company, Azule Energy, in equal shares, thanks to the combination of the Angolan activities of two companies. It also announced an interim dividend of $0.0546 per common share for the fourth quarter of 2021, which is due March 25, 2022.

The market capitalization of the FTSE 100-listed company stands at £70,264.14 million as of March 16, 2022. Shares in BP Plc were trading at 358.05 GBX, down 0.82%, at 11 1:55 a.m. (GMT), March 16, 2022. The company has returned 15.95% to its shareholders in the past year to March 16, 2022, while its year-to-date return stands at at 9.19%.

Note: The above content constitutes a very preliminary observation or viewpoint based on industry trends and is of limited scope without any fundamental assessment or in-depth technical analysis. Any interest in stocks or sectors should be carefully assessed taking into account the associated risks.


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Felix J. Dixon