China 2023 Oil Demand to Grow: OPEC’s Al Ghais

China's oil demand will grow 500,000 to 600,000 barrels per day in 2023, OPEC Secretary General Haitham Al Ghais said on Tuesday, as the world's top crude importer emerges from COVID-19 restrictions. "With China opening up, we are quite optimistic, cautiously," he told the CERAWeek energy conference in Houston. OPEC expects global oil demand growth to grow 2.3 million barrels per day in 2023, he said.

Al Ghais said he was not concerned about the rerouting of Russian crude exports to countries such as China and India in the wake of Russia's invasion of Ukraine. OPEC had witnessed many such changes in oil flows in the past, whether due to international politics or to the emergence of new demand centers, he said. "This is typical where we have redirection in flows from the east to the west or west to the east," Al Ghais said.

The conflict in Ukraine threatened to upend global oil markets as Russia is the producer of 10% of the world's supply, and Russian exports have been targeted by sanctions. On Dec. 5, the Group of Seven countries, the European Union and Australia implemented a price cap on seaborne cargoes of Russian oil, setting it at $60 a barrel as part of sanctions on Russia for its invasion of Ukraine. On Feb.5, the G7 and allies implemented a price cap on Russian fuel sales.

Russian oil production has been resilient, Al Ghais said, adding that the country's barrels have found buyers in markets like China, India and Turkey. OPEC and Russia are part of the OPEC+ alliance, working together on supply policy for global markets. When asked whether the alliance remained viable, Al Ghais said that the alliance is critical to stable oil markets and has been since producers started working together in 2016.