Asia will lead the global demand growth in oil this year as production on the continent declines, an official with the Paris-based International Energy Agency (IEA) said Tuesday.
“Both the very robust demand growth and declining supply will increase the import requirement of the Asian continent,” Keisuke Sadamori, director of the Energy Markets and Security Directorate at the IEA told CNBC’s “Squawk Box.”
Asian countries will also need to add refining capacity to respond to growing demand, he added.
While Sadamori indicated that there was some advancement in the oil supply-demand balancing act, robust production activity in the U.S. and the high inventory levels there also limit the progress even as OPEC and non-OPEC countries are complying well to an output cut agreement.
OPEC joined with non-OPEC producers on a coordinated pact to trim crude supplies be nearly 1.8 million barrels per day (bpd) for the first six months of the year.
The upside was that oil inventory levels came down slightly in the second half of 2016 due to strong demand growth, he said.
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