Fatih Birol, director of the International Energy Agency, said in a speech on Thursday (July 18) that global crude oil demand growth in 2019 was expected to slow to 1.1 million barrels per day, compared with 1.2 million barrels per day, as the international trade situation dragged down global economic growth.
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Last year, the IEA expected global crude oil demand to grow by 1.5 million barrels per day in 2019, but in June this year it lowered its forecast to 1.2 million barrels per day.
He believes that demand for crude oil is mainly hampered by the international trade situation, while U.S. shale oil production continues to climb. Relevant data show that U.S. crude oil production is expected to grow by 1.8 million barrels per day in 2019, down from a record 2.2 million barrels per day increase in 2018.
Birol said that the IEA is very concerned about the tension in the Middle East. Once the tension in the Strait of Hormuz leads to supply disruption, the IEA will take “quick and decisive” measures to balance the oil market.
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It is reported that 20 million barrels of crude oil will pass through the Strait every day, accounting for about one third of global crude oil trading.
At present, major key crude oil producers are looking for possible alternative routes. Among them, Iraq plans to export more crude oil through Ceyhan Port in Turkey and build new pipelines in Syria, Lebanon and Saudi Arabia to help export.
“These alternatives will not have a significant impact on the market in a very short period of time,” Birol said. But it will have a far-reaching impact on the oil market in the medium and long term.
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He believes that although tensions in Iran, Libya and Venezuela will support oil prices, oil prices will not rise too much “because of the rising production of shale oil in the United States”.