China Will be the Largest Uncertainty For Oil Markets This Year: IEA Chief

The oil market will face many uncertainties this year, but the largest uncertainty will be China, Fatih Birol, executive director of IEA said on BBG TV.

• When asked why China is will pose the largest uncertainty for the market Birol said: “the reason is very simple, last year 2022 for the first time in 40 years, Chinese oil and gas demand declined. And this year the Chinese economy is reopening, and we may see Chinese economy growing strongly and if Chinese demand for oil is strong it would put upward pressure on prices.”
• “China for me is the biggest uncertainty, followed by the oil producing countries”, he added.
• “Chinese oil demand will definitely increase this year; the question is how much. Chinese oil demand will bring about 800-900kbpd additional oil demand growth to the market,” Birol said.
• When asked about whether a recession would weigh on oil prices he said: “depending how deep, how wide the recession is but if it is a mild recession, I do not think we will see a big drop of oil prices as we have seen during the Covid times but it will definitely put downward pressure on the prices, if there is a widespread recession around the world but I do not believe that China will go into a recession.”
• He also said he does not believe that US SPR injections will put downward pressure on oil prices, as he assumes the US government will gradually fill up SPRs.