PwC comments on the IEA Oil Market Report for January 2024

Elisabeth Hunt, Sector Leader for Energy and Resources at PwC UK, said: 

“As expected, global oil demand continued to grow in 4Q-23, albeit at a reduced rate of 1.7mb/d compared to the 3.2mb/d registered in 2Q-23 to 3Q-23.

“Supply rates are also expected to rise to a new high of 103.5mb/d. This will be driven by non OPEC+ members, with expected record output levels produced by the US, Brazil, Guyana and Canada. Cuts announced by OPEC+ members in 2023 are still expected to be gradually phased out in Q2-24, as noted by the International Energy Agency (IEA), though this will have had an impact on market share. 

“While oil supply in 2024 appears to be strong, the risk of disruption from attacks in the Red Sea and the Suez canal does remain elevated. For context, 10% of the world’s seaborne oil trade passed through the trade route in 2023. Whilst shipping routes can and are being adapted, the temporary rise of Brent to $80 per barrel as a result of shipping attacks demonstrated the continued exposure of commodity pricing to geopolitical events.

“Government controlled and other stocks could provide some buffer however, should such events result in considerable disruption to the market.”