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China’s oil demand drops sharply as Beijing expands zero-Covid policy, OPEC says

China’s oil demand drops sharply as Beijing expands zero-Covid policy, OPEC says

OPEC made a sharp U-turn on its forecast for Chinese oil demand, while cutting its projections for global demand in 2022 and 2023.

The cartel now sees Chinese oil demand falling by 60,000 bpd this year after forecasting a 120,000 bpd increase a month ago. Beijing has locked down several provinces to stem a resurgence of the COVID-19 epidemic, which has so far dampened the country’s appetite for oil.

The sudden, negative swing in its forecast for China, the world’s biggest oil importer, coincided with a lower forecast globally.

OPEC cut its demand growth outlook for 2022 by 460,000 bpd to 2.64 million bpd and for 2023 by 360,000 bpd to 2.34 million bpd.

OPEC cited “the extension of China’s zero-count Covid-19 restrictions in some regions, economic challenges in OECD Europe and inflationary pressures in other key economies” as reasons for the lower outlook this year.


Brent crude fell 1.85% to $92.55 a barrel and West Texas Intermediate fell 2% to $87.51 a barrel.

The new outlook comes a week after OPEC cut its production quota by 2 million bpd, prompting sharp criticism from the Biden administration and even a promise to reassess US relations with Riyadh.

President Joe Biden has criticized OPEC’s de facto leader Saudi Arabia in recent days, and his White House has accused OPEC of siding with Russia in response to production cuts.

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