Demand for oil is more likely to hit new heights this yr, after consumption of the fossil gasoline reached a report excessive in June, based on the Worldwide Vitality Company (IEA).

The IEA’s newest oil market report revealed Friday notes that oil demand hit a report 103 million barrels a day in June, pushed by better-than-expected financial progress in wealthy nations, summer season air journey and surging demand for the fossil gasoline in China, notably for petrochemical manufacturing.

In consequence, the influential group mentioned it expects international oil demand to hit a median of 102.2 million barrels a day in 2023, which might be the very best annual degree.

China alone, the place COVID-19 restrictions have lastly begun to be eased over the previous yr, is ready to account for 70 p.c of the expansion in anticipated oil demand in 2023, it mentioned.

Nonetheless, whereas oil demand continues to be rising, progress is ready to decelerate subsequent yr because the clear vitality transition gathers tempo and the worldwide financial restoration from the pandemic peters out, the IEA harassed.

It predicted elements reminiscent of tighter vitality effectivity requirements and the continued rise of electrical automobiles would serve to greater than halve oil demand progress from 2.2 million barrels a day in 2023 to 1 million barrels a day subsequent yr.

“With the post-pandemic restoration having largely run its course and because the vitality transition gathers tempo, progress will sluggish to 1 million barrel a day in 2024,” it mentioned.

The IEA’s findings echo latest predictions made by vitality analyst Wooden Mackenzie, which contended in a report revealed in July that oil demand would proceed to develop all through the 2020s, earlier than peaking within the 2030s when electrical automobiles (EVs) start to considerably eat away at fossil gasoline demand. The analyst predicted that whereas the speed of progress in demand will begin to sluggish from 2024 onwards, consumption won’t fall till subsequent decade.

Elsewhere in its oil market replace, the IEA famous that international stockpiles of oil are thinning after Saudi Arabia and Russia have made cuts in provide, in a transfer designed to shore up costs for the fossil gasoline. The oil report predicts that output from OPEC+ nations may fall to a two-year low in 2023.

Provide from nations that sit outdoors the OPEC+ bloc is anticipated to dominate world provide progress subsequent yr, it predicts, with the U.S. anticipated to make up 80 p.c of worldwide 2023 provide progress, or 1.2 million barrels a day.