The Organization of Petroleum Exporting Countries (OPEC) cut its projection for growth in world oil demand in 2022 on Tuesday, citing the impact of Russia’s invasion of Ukraine, rising inflation, and the return of the Omicron Coronavirus in China.
In a monthly report, the OPEC said world demand would rise by 3.67 million barrels per day (bpd) in 2022, down 480,000 bpd from its previous forecast, Reuters reported on Tuesday.
The invasion in February sent oil prices soaring above $139 a barrel, the highest since 2008, worsening inflationary pressures. Crude has since fallen as the United States and other nations announced plans to tap strategic oil stocks to boost supply, but remains over $100.
“While it is forecast that both Russia and Ukraine will be facing recessions in 2022, the rest of the global economy will be thoroughly impacted as well,” OPEC said in the report.
“The strong rise in commodity prices in combination with ongoing supply-chain bottlenecks and COVID-19-related logistical logjams in China and elsewhere are all fuelling global inflation.”