OPEC foresees challenges to oil demand from Ukraine war, inflation

OPEC said on Tuesday that oil demand in 2022 faced challenges from Russia’s invasion of Ukraine and rising inflation as crude prices soar, increasing the likelihood of reductions to its forecast for robust demand this year.

Oil prices shot above $139 a barrel this month, hitting peaks not seen since 2008, as Western sanctions tightened on Moscow over its invasion of Ukraine and disrupted oil sales from Russia, helping to fuel inflation that was already rising.

In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) stuck to its view that world oil demand would rise by 4.15 million barrels per day (bpd) in 2022 and increased its forecast of global demand for its crude.

But OPEC, which just a month ago had raised the possibility of a more rapid demand increase in 2022, said the war in Ukraine and continued concerns about COVID-19 would have a negative short-term impact on global growth.

“Looking ahead, challenges to the global economy – especially regarding the slowdown of economic growth, rising inflation and the ongoing geopolitical turmoil will impact oil demand in various regions,” OPEC said in the report.

About Blessing Anaro, Lagos, with agency report

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