Oil demand in the Middle East always surges in the summer as liquids are diverted to power plants to help meet soaring demand for electricity, and 2023 is proving to be no exception. Indeed, oil-for-power is already running at record-seasonal levels ahead of the peak demand season, pointing to another record-breaking summer ahead. While governments across the region are implementing projects to break this expensive habit, this oil demand seasonality is set to remain in place for years to come.
The looming surge in Middle East oil burn will therefore exacerbate the impact of Opec+ cuts on global oil supplies. Even if ministers opt against changing production quotas on 4 June, oil exports from the Opec+ Middle East heartland are set to drop in the coming weeks. (CONTINUED - 1692 WORDS)