Energy Crisis Is Changing Demand Patterns—For Now
Norway’s Offshore Oil Production Beats Forecasts in April Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
Roughly one-fifth of global LNG flows has been impacted by the Hormuz crisis.
The cumulative losses in crude oil supply have topped 1 billion barrels since the start of March.
Governments are rationing fuel and advising conservation.
Some are already predicting a complete transformation of global energy consumption patterns.
But these predictions are a bit premature.
Earlier this month, the International Energy Agencywarnedin its monthly oil report that the world’s oil supply this year will be 3.9 million barrels daily lower than it was last year.
The reason is, of course, the oil flow disruption caused by the war between the United States and Israel, and Iran, which has slashed production from the Middle East by over 10 million barrels daily.
In other words, the IEA expects most of Middle Eastern production to resume well before the end of the year.
Yet the IEA also issued a prediction about demand for oil, and that is going to decline by a lot less than 3.9 million barrels daily.
More precisely, the IEA said it expected global oil consumption to shrink by 420,000 barrels daily, reflecting the resilience of demand for the most essential commodity in any economy.Related: IEA: Oil Shock Sparks Surge in EV Sales Other observers and analysts are not as optimistic about the resumption of oil production and expect shortages.
“You can only decrease consumption so much, and when inventories run out, they are going to run out,” Ellen Wald, senior fellow at the Atlantic Council’s Global Energy Center, told the Wall Street Journal this month.
| Product | Price | Change |
|---|---|---|
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| WTI Crude | $96.90/bbl | ▲ +0.21% |
| EN590 Diesel | $846/MT | ▲ +0.18% |
| Jet Fuel A-1 | $1090/MT | ▲ +0.55% |
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| Bitumen 60/70 | $470/MT | ▲ +0.08% |
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| Urea 46% Gran | $650/MT | ▲ +1.12% |
| NPK 16-16-16 | $460/MT | ▼ -0.28% |
| Nat Gas TTF | $15.42/MMBtu | ▲ +0.92% |
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