In 2023, global oil demand is expected to grow by 1.9 million barrels per day to a record 101.7 million barrels per day. Almost half of the increase will come from China, which is lifting restrictions in connection with Covid-2019. Jet fuel remains the largest source of growth, up to 840 thousand barrels per day. Oil demand in OECD countries fell by 900 thousand barrels per day in the 4th quarter of 2022 due to weak industrial activity, while demand in non-OECD countries increased by 500 thousand barrels per day.
The growth of global oil supplies in 2023 will slow down to 1 million barrels per day after last year's OPEC+ growth of 4.7 million barrels per day. The overall increase in production outside OPEC+ by 1.9 million barrels per day will be restrained by the fall of OPEC+ by 870 thousand barrels per day due to the expected decline in Russia. The United States is considered the leading source of oil supply growth in the world, along with Canada, Brazil and Guyana, breaking the annual production record for the second year in a row.
Global refinery activity remained stable in December 2022, as U.S. production fell by 910,000 barrels per day due to weather-related downtime, but increased production in Europe and Asia offset the overall decline. After an increase of 2.1 million barrels per day in 2022, the capacity of the refinery in 2023 will increase by 1.5 million barrels per day, which will be facilitated by an increase in capacity by 2.2 million barrels per day in the period from the 4th quarter of 2022 to the end of 2023.
In December 2022, Russian oil exports fell by 200,000 barrels per day to 7.8 million barrels per day, due to a reduction in supplies to EU countries after the EU embargo on Russian oil and G7 price restrictions came into force. Diesel fuel exports from Russia, on the contrary, rose to a multi-year high of 1.2 million barrels per day, of which 720 thousand barrels per day were destined for the EU. Record discounts on the Russian reference grade Urals led to the fact that Russia's revenue fell by $ 3 billion per month to $ 12.6 billion.
The world's observed oil reserves in November 2022 increased by 79.1 million barrels per month, reaching the highest level since October 2021. The growth leaders were the reserves of non-OECD countries (+43.9 million barrels) and oil in tankers (+38.1 million barrels). In the OECD countries, the release of government reserves offset a small increase in industry assets. The OECD countries' industrial reserves at 2,779 million barrels were 37.1 million barrels more than a year ago, but 125.9 million barrels below their five-year average.
Benchmark oil futures continued their decline in December 2022: ICE Brent fell by $9.51 per barrel to $81.34 per barrel. The lifting of Chinese restrictions due to Covid did little to boost sentiment, while Russian oil exports remained steady. Shutdowns of refineries in the United States have led to the elimination of shortages in products. Freight rates for large crude oil carriers decreased, but increased on grocery routes ahead of the EU embargo on Russian petroleum products.
