The International Energy Agency has upgraded its global oil demand forecast in the wake of the reopening of China’s economy which follows years of strict Covid-19 lockdown measures.

According to Bloomberg News, the agency has raised global demand estimates by 500,000 barrels per day in the first quarter of the year and by half as much for the remainder of the year. 

Consequently, global consumption will increase by 2 million barrels per day for a total average of 101.9 million barrels per day in 2023, the IEA notes in its monthly report.

”China’s reopening will give a welcome boost to the listless world economy. The country is set to resume its established role as the primary engine of world oil demand growth,” the Paris-based agency notes as cited by Bloomberg News.

However, the IEA also expects global oil markets to remain in surplus in the first half of the year as a result of surprisingly strong oil output from Russia.

At the end of the first quarter, Russia’s oil production is expected at 1 million barrels per day lower than levels registered prior to the war in Ukraine, adjusted from last month’s forecast of a decrease at 1.6 million barrels.

Meanwhile, oil demand in China is expected to increase by 900,000 barrels per day for an average of 15.9 million barrels per day in 2023.