Aramco chief executive bullish on demand prospects

Crude demand has improved from the lows brought on by Covid-19 and is likely to reach the level of January 2020 by the end of this year, state-controlled Saudi Aramco's chief executive Amin Nasser said today.

Demand, which fell by 20mn b/d in April 2020, is "improving, we have seen [in] China, east Asia strong demand there. If I look at India, it is also picking up, it is almost as pre-Covid" levels, Nasser told a virtual session of CERAWeek by IHS Markit. He said that demand is around 94mn b/d and is likely to rise to 99mn b/d by the end of the year.

Consumption continues to be affected in some western countries, including the US, "but with the rapid deployment of vaccines, we are seeing good cause for optimism and recovery in demand," Nasser said. "I see demand continuing to improve, especially from the second half of this year."

Nasser has long been more optimistic than some, including Opec, about the timescale of a demand recovery. In October last year he told the Energy Intelligence Forum that he hoped for a return to pre-pandemic demand levels "by 2022". Opec's secretary-general Mohammed Barkindo today pegged demand at around 96mn b/d this year, although he said that "the days of GDP and oil demand figures being in the red because of the pandemic-induced shock appear to be behind us."

Saudi Arabia chose to err on the side of caution by pledging to cut its output by 1mn b/d beyond its commitments under the Opec+ deal in February and March in a bid to reduce global stocks. Opec+ is meeting this week to decide on output policy beyond this month.

By Samira Kawar