(IEA) The International Energy Agency expects the emergence of the Omicron variant to only slow down oil demand recovery, with impacts relatively muted.
IEA says Omicron is likely to ease oil supply tightness which faced global markets recently. The agency says the variant will allow supply to overtake demand.
IEA trimmed next year’s oil supply from non-OPEC members by 100,000 barrels per day, while also reducing the demand by similar margins. It still expects Canada, the US, and Brazil to pump oil at record levels, raising non-OPEC output by 1.8 million bpd next year.
Air travel is cited by IEA as the sector to suffer the most from the Omicron variant, with the agency still seeing temporary setbacks in the overall crude demand.
Although oil fell initially on the Omicron concerns, IEA says the initial concerns have been replaced by a more measured response. The agency expects pre-pandemic oil consumption in the course of 2022.
IEA’s views reflect those of the oil cartel OPEC+, which also said the Omicron variant impacts will be short lived.
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