Red Sea shipping diversions start to boost bunker demand

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THE International Energy Agency’s (IEA) March report indicates a rise in demand for bunker fuel, the primary fuel for ships, due to disruptions caused by Houthi attacks on cargo vessels, reports New York’s FreightWaves.

This, coupled with robust demand growth from the US has prompted the agency to revise its supply/demand estimate for 2024, foreseeing nearly 120,000 more barrels per day in demand compared to its previous forecast just a month ago.

Previously, in February, the IEA had anticipated global petroleum demand for 2024 to be around 103 million barrels per day. However, this forecast has now been adjusted to 103.18 million barrels per day.

For 2023, the IEA’s current estimate indicates global consumption of 101.84 million barrels per day, but this estimate is subject to further revision as more data becomes available.

The significant year-on-year demand increase expected in the first quarter is a crucial factor driving the upward revision of both first-quarter and full-year demand estimates.

Global demand in the first quarter of 2024 is projected to surpass that of the same period in 2023 by 1.7 million barrels per day, reaching just over 102 million barrels compared to just over 100 million.

This pace of increased first-quarter consumption outstrips the current projection of a 1.34 million barrels per day increase in global demand for the entire year.