On Sunday, the Executive Director of the International Energy Agency, Fatih Birol, said oil producers may have to reconsider their production policies after the recovery of demand in China.
China is the largest importer of crude in the world, and the second buyer of liquefied natural gas and investors are betting on the speed of its recovery after Beijing lifted anti-COVID-19 restrictions in December in order for its demand for oil to recover more and more.
"We expect about half of the growth in global oil demand this year will come from China," Birol told Reuters on the sidelines of the India Energy Week conference.
He added that the demand for aviation fuel in China is increasing sharply, which puts upward pressure on demand.
"If demand goes up very strongly, if the Chinese economy rebounds, then there will be a need, in my view, for the OPEC+ countries to look at their (output) policies," Birol said.
He stated that a cap on Russian oil prices would likely cut Moscow's revenue from oil and gas exports by 30% in January, or about $8 billion, compared to the previous year.
Birol added that fuel markets could face difficulties in the short term as global trade routes "adjust" to accommodate Europe's growing dependence on imports from China, India, the Middle East, and the United States.
He said this may force other markets, such as Latin America, to look for alternative imports.
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