World Oil Demand
OPEC Monthly Oil Market Report – August 2017
, the first six months of 2017 indicate a 3.0% y-o-y decline in oil requirements. The main
factors behind this are the sluggish volumes for crude direct use, as well as diesel oil, mainly in the industrial
sector, due to the substitution to natural gas.
Strong oil demand in the first six months of 2017 has been observed in Iraq. Demand for all main petroleum
product categories was solid, notably for crude direct use, gasoline, diesel oil, jet/kerosene and residual fuel
oil. Naphtha, however, saw a decline, which can be largely attributed to fuel substitution with natural gas.
Y-t-d, oil demand in 2017 also grew strongly in Qatar and the UAE.
The outlook for 2017,
remains positive with risks generally skewed to the upside.
Some factors that may curb oil demand in the region during 2017 are domestic petroleum product retail
prices, fuel substitution, as well as the economic development in the region’s main oil consumers. For 2017,
Middle East oil demand is forecast to grow by 110 tb/d, while oil demand in 2018 is projected to increase by
The growth in Chinese oil demand in June 2017 continued its strong growing pace with 4.5% y-o-y, in line
with strong economic growth, which mainly lifted oil demand in the transportation and industrial sectors. As in
previous months, demand for LPG and gasoline grew for one more month substantially on account of healthy
growth in the petrochemical industry as well as the road transportation and sectors. Gasoline demand added
a mere of 0.18 mb/d y-o-y, substantially higher than growth in similar months and in line with a rebound in
auto sales; the latter came mainly as a result of higher taxes imposed on auto sales as of March 2017.
Residual fuel oil demand rose by more than 13% y-o-y. Residual fuel oil is mainly used in teapot refineries,
whose capacities do not exceed 100 million metric tons per year. Moreover, diesel demand returned to
growth after declining in May 2017, y-o-y, as a result of usage in the transportation and industrial sectors.
The overall outlook for the Chinese oil demand for 2017 and 2018 is positive with risks remaining skewed to
the upside, mainly as a result of the projected economic growth in combination with a flourishing
petrochemical industry and upside potentials in the country’s transportation sector. Some downside risks are
related to fuel substitution in the industrial sector, in addition to efficiencies and alternative vehicle
penetration, electric cars and bicycles, in the road transportation sector.
Graph 4 - 13: Chinese apparent oil demand,
Graph 4 - 14: Chinese diesel oil and gasoline
demand, y-o-y change
Chinese oil demand
is expected to grow by 0.36 mb/d, while oil demand in 2018 is projected to
increase again by 0.31 mb/d.
Sources: Argus Global Markets, China OGP (Xinhua News
Agency), Facts Global Energy, JODI, National Bureau of
Statistics of China and OPEC Secretariat.
Sources: Facts Global Energy, China OGP (Xinhua News
Agency), Argus Global Markets, JODI, National Bureau of
Statistics, China, OPEC Secretariat calculations.