Wood Mackenzie, Global Research Group, Predicts That 2023 Will Be Turbulent and Unstable for the Oil and Natural Gas Market Economy

Economic Uncertainties and Geopolitical Conflicts Will Continue to Impact the Market Economy Throughout This Year. Wood Mackenzie Projects an Unstable Scenario Regarding the Balance of Supply and Demand in the Global Oil and Natural Gas Sector.

After a year of major international conflicts and impacts on the global oil and gas market, the problems may not be minimized in 2023. Wood Mackenzie projects a year of instability and turmoil in the oil and natural gas sector, especially regarding economic uncertainties and conflicts in Europe. Issues involving Russia and the European Union will still be central points in the market this year.

Market and Economy of the Oil and Natural Gas Sector May Not Stabilize in the First Part of 2023, As Projected by Wood Mackenzie

The year 2022 was marked by significant geopolitical conflicts in Europe and a decline in the stability of oil and natural gas supply and demand worldwide, with strong impacts on the domestic economies of several countries.

Although the problems were minimized at the end of the previous year, the year 2023 may initially continue with turmoil and instability in the global market, projects Wood Mackenzie.

The consultancy highlights that economic uncertainties will set the tone for the balance between oil supply and demand this year, directly impacting the segment worldwide.

The segment of petroleum and natural gas derivatives is expected to experience a weakening of the tightness in the international market, as well as the gas segment, despite being far from stability.

Wood Mackenzie’s projections for the coming months in the oil and natural gas sectors are based on the perspective that some major economies will enter recession and the global economy will slow down in 2023.

The geopolitical issue in Europe, especially regarding Russia, remains a problem to be faced in this year of 2023, particularly when discussing the supply of oil and natural gas, as the nation is a major producer of these fuels.

Although, at this initial moment, the economic sanctions from the European Union are having a minimal impact on Russia’s product exports, it is still possible that the country’s economy and market will suffer the consequences in the coming months.

The Oil Refining Market May Benefit in 2023, Reducing the Tightness Left in 2022, Highlights Wood Mackenzie

In addition to the oil and natural gas segment itself, Wood Mackenzie has made projections for the refining market in 2023, with optimistic news.

The expectation is that new supply sources will help reduce the tightness in the global market, according to the company.

The company expects that more than 1.4 million barrels/day of refining capacity will be added to the current capacity throughout the year 2023.

The first half of the year, however, should see elevated margins for the oil refining segment, while the second half will bring greater stabilization in the segment. Last year, they reached record levels during the summer.

“However, there are several uncertainties that may disrupt this outlook, in addition to the typical challenges of project completion and commissioning. This includes China’s product export policies and the European Union’s ban on importing refined products from Russia, to be implemented in February,” highlights Wood Mackenzie in its report.

The company expects that the global market and economy of the sector can recover and defy projections throughout the year.