A week after announcing a 2-million-bpd headline reduction to its collective oil production target, OPEC reduced on Wednesday its projections for the growth of the world’s oil consumption in both 2022 and 2023.

OPEC reduced its projection of the growth in global oil demand for 2022 by 460,000 barrels per day (bpd) in its Monthly Oil Market Report (MOMR), which was released yesterday. The organisation cited China’s COVID lockdowns, economic headwinds in developed economies, and inflationary pressures everywhere. The organisation reduced its 2023 oil demand growth prediction by 360,000 bpd and now expects growth of 2.3 million bpd in 2019.

According to OPEC, the average global oil demand will increase by 2.6 million bpd this year to 99.7 million bpd.

Last week, the OPEC+ group announced the largest reduction to its joint target since 2020, resulting in significant negative adjustments to oil demand growth this year and next. In today’s report, OPEC revised its predictions for the growth of global oil demand downward, citing tougher economic headwinds as justification.

Excerpt from the report on the current market realities:

“Global economic growth has entered into a period of significant uncertainty and deteriorating macroeconomic conditions, amid intensifying challenges including high inflation levels, tightening monetary policies by major central banks, rising interest rates and persisting supply chain issues.”

“Looking ahead, and despite the usual seasonal hike in oil demand for heating, the challenges presented by the heightened levels of uncertainty, the slowing economic growth and a possible resurgence of COVID restrictions in China and elsewhere are expected to impact oil demand in 2022 and 2023,” the cartel said. OPEC also noted that last week’s decision of OPEC+ to cut 2 million bpd off its target production level was a pre-emptive and pro-active move “in an ongoing and relentless effort to provide a sustainable stability to the market.”