Middle East oil demand to stay robust in 2009

DUBAI (Reuters) – Oil demand growth in the Middle East will slow but stay robust in 2009 as governments in the world’s top exporting region boost spending to cushion the impact of the global economic slowdown.

The deteriorating world economy was expected to burn less oil for the second consecutive year in 2009. But while demand contracts elsewhere, the International Energy Agency (IEA) expects cheap fuel to lead to Middle East consumption rising by around 200,000 barrels per day (bpd) or nearly 3 percent.

“Demand for transportation fuels in Saudi Arabia and Iran will continue to give support in the region because the fuel is still heavily subsidized in these countries,” said Eduardo Lopez, senior analyst at the Paris-based IEA said.

Saudi and Iranian gasoline is among the world’s cheapest and six years of economic growth fueled by record oil export revenues has increased the number of vehicles on the roads.

Demand for power generation in Saudi, Iran and Kuwait and feedstocks for petrochemical plants were also expected to bolster consumption, Lopez added.

Reuters