Aramco CEO predicts record oil demand will follow OPEC+ output revival

(Bloomberg) – Global oil demand will hit a record this year as Asian countries, particularly China and India, continue to expand consumption, said the head of the world’s biggest oil producer Saudi Aramco.

Oil use is set to rise by 1.3 million barrels a day (bpd) this year to just over 106 million bpd, helped for petrochemicals and jet fuel, Chief Executive Officer Amin Nasser said on an earnings call Tuesday. That’s slightly higher than the 1.05 million bpd growth forecast by the International Energy Agency.

Aramco has long been positive about demand, including in its largest market China even as the Asian nation was sluggish to recover from the coronavirus pandemic. His latest comments come a day after OPEC+ and its de-facto leader Saudi Arabia said they would proceed with long-delayed plans to unwind production cutbacks, even though economic growth prospects remain weak.

The OPEC+ decision can only help Aramco and other producers as they will benefit from higher sales, Nasser said. 

Saudi production has lingered near the lowest level in more than three years. That combined with subdued oil prices to push Aramco’s net income for 2024 lower, slightly missing analysts’ estimates. The company also followed through with a previously announced plan to cut its total dividend for 2025. 

Oil in London dropped to the lowest in almost three months this week, following the OPEC+ plan. Brent was trading near $70 a barrel on Tuesday, below the more than $90 that Saudi Arabia needs to balance its budget.

Separately, Nasser said that expansion in liquefied natural gas (LNG) and petrochemical projects are key for the company’s growth.