The agency said a resurgence in COVID-19 cases is slowing the rebound, but a widespread vaccination effort and an acceleration in economic activity is expected to spur stronger growth in the second half of the year.
According to the IEA, global demand in 2020 was 8.8 million bpd lower than in 2019, recording an 8.8% decrease to 91.2 million bpd.
The IEA said global oil supply rose by 30,000 bpd in December to 92.7 million bpd and forecast more increases in 2021.
“As things now stand, global output could rise by more than 1 million bpd in 2021 provided OPEC+ continues to unwind its record cuts of 2020, Libya sustains its recovery and higher prices spur those outside OPEC+ to pump more,” the IEA said.
The agency said as the US is expected to post another annual production decline in 2021, OPEC+ may start to reclaim the market share it has steadily lost to others outside the bloc since its creation in 2016.
Boosted by Libya’s further recovery and modest increases in the UAE and Iraq, crude oil production of OPEC countries reached 25.2 million bpd in December, recording an increase of 150,000 bpd compared to the previous month.
In 2020, OPEC posted a decline of 3.8 million bpd year over year that left annual crude supply at 25.7 million bpd.
Non-OPEC production saw a decrease of 130,000 bpd to 62.36 million bpd.