And i want to kick off where we just Ended with matthew and that is Energy demand improving ceo ahmed nasser Is talking about china and india As demand growth improving but it's very Worrisome when you look at The west the united states and europe What do you see when you look at demand Yeah uh that is absolutely correct um It's often quite difficult to know oil Demand or oil consumption In real time but what we do know is Where the refineries are running And we know that pretty much daily and It's indeed very consistent with the Observation that you just mentioned Refineries in the non-oecd are running Pretty much as hard and as fast as they Did Uh before coronavirus um it's the the Weakness is concentrated um in the oecd Countries the us Europe the rich developed world but i Think there there are some Uh reasons to be optimistic um one of The countries of course that we track in A huge amount of detail is israel It's a bit of a petri dish of what can Happen to mobility and oil consumption As a result of vaccinations and what we See there very clearly Is that there is only a very short time Lag between vaccinations picking up a Mobility picking up
So if israel is in any way a template For the rest of the oecd On what could happen to mobility and oil Demand once vaccination Reach sort of critical threshold levels Then i think there are good reasons to Be optimistic for the second half of the Year particularly towards the end of the Year If the second half of the year is going To be potentially what we're seeing Right now in israel to other parts Of the world um how worrisome is it in Terms of Actually having the supplies on hand Because you know that opec is keeping Very much a tight lid On those supplies yeah Look uh this is one of the reasons why The oil prices rallied so much over the Last couple of months Um the the practical reality is this Based on the inventory draws that we can See and we can see a lot of inventories These days We think the oil market is under Supplied already by something like two Maybe two and a half million barrels a Day Now that's a lot that is at the historic Operand of how much oil oil markets can Be under-supplied Um and again against that backdrop uh we Think that about four million barrels a
Day of demand will come back Uh now mathematically very quickly that Leaves about a six million barrel a hole In the oil market And then the question is who is going to Fill that um and the answer to that Question in 2021 Is not the non-opec producers it takes Time to ramp up non-opera production Usal can respond quicker but even the U.s even u.s producers Will struggle to to generate production Growth Uh this year that that could be very Much a 2022 story So this year opec who admittedly does Have a lot of spare capacity And could fill this gap um opec is in The driver's seat And they are they are having control of Your market this year Goldman sachs called the recent sell-off In oil transient last week we had one of The worst weeks since October do you still maintain this 70 Plus Price on brent martin Um yeah no like we would largely uh we Would largely agree with that view Um look commodities are not like Equities right equities reflect Expectations of earnings and cash flow Between now And forever appropriately discounted oil
Prices Mostly depend on the supply demand Balance Well sort of right here right now over The next couple of months Um it if you look at what will happen We think over the summer as we go into The third quarter in particular very Steep inventory rules um As the demand growth really picks up as We just discussed We're forecasting 70 as an average for Brand for the third quarter Uh but have written that we could very Much overshoot that level Uh now what will then happen in 2022 and 2023 is open to debate Uh but in this reopening rally there are Tensions In the system that we think can only Really be resolved By prices going to those levels One point i just wanted to finish on is According to Some of the data we're seeing from Traders and analysts is that when it Comes to iranian Oil leaving iran it's about 1 million Barrels and that is going to china How complicated does that make opec plus Job The next you know five Meetings down the road if we are seeing Uh
Iranian oil come back into the market When These obviously not supposed to given The sanctions Yeah um that's uh that that is a Question that we all Worry for uh a a lot about um look the Practical reality is this There is room in the oil market uh for More supplies including iranian supplies If this comes towards the end of the Year uh then Um it will be a lot easier to absorb um Because by then we think demand will Have recovered Sufficiently and the the the hole in the Old market so to say Will be large enough that there is room For many players But it's indeed it's indeed true that if This were to come A lot sooner than the end of the year Say over the summer already Yeah then um That could that could change the outlook This is one of the key risks I would say to to our outlook and Generally the markets uh uh bullish Outlook if this supply comes earlier Then opec will need to find a way to Accommodate this uh and that would be Um that would be simply a challenge and There is no other way Around that
