Oil Demand Soars, Goldman Predicts Record High 2023-2024

by | Jul 25, 2023 | Demand, News, Oil Prices, Why Invest in Oil

Emerging markets (post-pandemic) are a driving force behind the increasing energy demand. ‘All Time High’ Oil Demand and limited supply will drive prices up.

Goldman Sachs Anticipates Record Oil Demand Driving Crude Prices to New Heights

In a bold and optimistic projection, Goldman Sachs, a leading financial institution, foresees a significant surge in global oil demand that is expected to propel crude prices to new highs in the near term. The firm’s head of oil research, Daan Struyven, recently shared their insightful analysis during an interview with CNBC’s “Squawk Box Asia,” shedding light on the factors contributing to this unprecedented demand and the implications it holds for energy markets worldwide.

According to Goldman Sachs, the second half of the year is likely to witness substantial deficits in the oil market, with a staggering shortage of nearly 2 million barrels per day projected for the third quarter. This anticipated surge in demand would reach an all-time high, driven by a combination of factors that have gradually shaped the post-pandemic global economic recovery.

The global economic rebound following the COVID-19 pandemic has been swift and robust, generating a surge in various economic activities.

Industries have sprung back to life since mobility restrictions have eased, resulting in a sharp uptick in energy consumption. As nations strive to revive their economies and meet the needs of their growing populations, the demand for oil has skyrocketed.

The rapid industrialization of emerging markets has been a driving force behind the increasing energy demand. Countries like India and China have witnessed remarkable growth, leading to a surge in energy requirements for industrial purposes and transportation. Their expanding middle class and urbanization have significantly contributed to heightened energy consumption, placing further strain on oil resources.

Moreover, the resumption of international travel has played a pivotal role in boosting oil demand.

With borders reopened, airlines resuming flights, and tourism regaining momentum, the aviation industry’s thirst for jet fuel has intensified. This substantial increase in air travel is expected to be a major contributor to the overall demand for crude oil.

Goldman Sachs’ analysis aligns with the projections of the International Energy Agency (IEA), which has consistently revised its forecasts upwards, predicting a continuous increase in global oil demand. The IEA’s insights reinforce the notion that the world’s energy requirements are surging, leading to unprecedented challenges in meeting the escalating needs of a growing population and economies.

The implications of soaring oil prices extend beyond energy markets, significantly impacting consumer prices and industrial operations.

As oil plays a vital role in the production and transportation of goods, industries reliant on petroleum products may face rising costs, potentially leading to higher prices for consumers. Governments around the world will also face economic and geopolitical challenges. Nations that heavily rely on oil imports might experience economic strains, while oil-exporting countries may witness enhanced revenue and geopolitical influence.

Daan Struyven emphasized the role of the United States in the oil supply equation.

Although U.S. crude oil production has surged significantly over the past year, reaching 12.7 million barrels per day, the pace of growth is expected to slow throughout the rest of 2023. Goldman Sachs predicts a sequential pace of just 200 barrels per day from this point forward, citing a decline in rig counts as a primary factor. Rig counts are a crucial metric used to assess drilling activity and future output.

The U.S. oil rig count recently hit its lowest level in 16 months, down 15% from its late 2022 peak, as reported by Goldman Sachs, referencing data from Baker Hughes and Haver. Last week, Baker Hughes reported that U.S. oil rigs fell by 7 to 530, the lowest count since March 2022. This decline in drilling activity further emphasizes the firm’s projection of slowed oil supply growth in the United States.

In June, the International Energy Agency had already predicted a substantial rise in global oil demand, expecting a surge of 2.4 million barrels per day in 2023, surpassing the previous year’s increase of 2.3 million barrels per day.

Joseph McMonigle, the secretary-general of the International Energy Forum, further supported Goldman Sachs’ projections, forecasting that both India and China would contribute a significant 2 million barrels per day to the demand pickup in the second half of 2023.

Goldman Sachs’ anticipation of record oil demand and its projected impact on prices have ignited discussions about the future of global energy policies. The forecast highlights the urgent need for nations and industries to explore diversified and sustainable energy strategies. As the world grapples with complex economic, environmental, and geopolitical challenges, striking a balance between meeting energy demands and securing a sustainable future remains a paramount objective.


Goldman Sachs’ projection of record-high oil demand leading to elevated crude prices captures the complexities of the current global energy landscape, urging stakeholders to pursue transformative actions towards cleaner energy sources while preparing for potential economic and geopolitical consequences. As the world navigates the uncertainties of oil demand and supply, proactive measures are required to ensure a stable and sustainable energy future for all.