China's oil demand is expected to increase dramatically
China's oil demand is expected to increase dramatically
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Beijing: If Chinese demand increases, international oil producers may need to reevaluate their output strategies, according to Reuters' citation of the International Energy Agency (IEA).

The warning was issued at the same time that the OPEC+ group of major oil-producing countries, led by Saudi Arabia and Russia, decided last week to keep output at its current level.

The IEA's executive director, Fatih Birol, told the media on Sunday at the India Energy Week conference that "we expect about half of the growth in global oil demand this year will come from China." He continued, saying that the demand for jet fuel in China is surging, pushing up prices.

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In my opinion, the OPEC+ countries will need to review their [output] policies if demand increases significantly and the Chinese economy recovers, Birol said.

Despite pressure from the US to pump more, OPEC+ member states decided in October to reduce output by 2 million barrels per day from November through 2023 - the biggest reduction since 2020.

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In response to Western sanctions on Russia, the energy alliance decided against further output reductions, citing worries that Moscow may reduce oil production in response to the embargo and price cap on its seaborne oil exports.

According to experts, uncertainty over Chinese demand also played a role in OPEC's decision, as the country is still dealing with the effects of the Covid-19 pandemic despite being the world's largest importer of crude and the second-largest buyer of LNG.

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The production cuts decided upon last year should be maintained, according to the OPEC+ Joint Ministerial Monitoring Committee, which tracks the alliance's compliance with its output quota.

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