Oil markets could rebalance as early as 2022, UAE minister says

Demand growth could recover to average between 105 and 109m bpd between now and 2040

Abu Dhabi, United Arab Emirates - H.E. Suhail Al Mazrouei, UAE Minister of Energy for the opening of the 24th World Energy Congress at ADNEC. Khushnum Bhandari for The National

Global oil markets are expected to rebalance by 2022, with oil demand growth likely to recover to a range of 105 to 109 million barrels per day between now and 2040, the UAE's energy and infrastructure minister said on Tuesday.

"I think there is still room to grow beyond the 100 million bpd. If you look at different expectations in 2040, it ranges from 109 to 105m bpd," Suhail Al Mazrouei told the Atlantic Council Global Energy Forum 2021 event, which is being held online.

"We're talking about a growth in the population. We're talking about many people who cannot afford electricity or [a] car [who] may do that in the next coming 20 years or so," he added.

The UAE, which is one of the 23 members of the Opec+ alliance, is drawing back some of its supplies in line with the group's efforts to shrink global inventories.

The Covid-19 pandemic dealt a severe blow to demand for crude last year, as populations remained under lockdown to prevent its spread.

Oil producers came together to agree on some of the largest curbs ever taken as a group, to support an industry that was ravaged by an unprecedented plunge in prices.

Opec+ is currently holding back 7.2m bpd of output and is currently holding monthly meetings to gauge demand levels and whether incremental production increases can be made in line with the easing of restrictions and a pick-up in economic activity.

"I think this year, the way we see it, is the year of recovery, whether it's going to be the end of the year where we were supposed to reach the balance, or the beginning of 2022," Mr Al Mazrouei said.

He said the producer group was optimistic that its efforts will achieve a rebalancing of supply and demand by the "beginning of 2022".

"I am hoping that the pace of the vaccine will positively surprise us, and hopefully we can catch up earlier than that," he added.