Surging Oil Demand Soared to Near-Record Levels in May 2023

by | Jul 18, 2023 | Crude, China, Demand, India, Production, Saudi Arabia, United States

The world’s oil demand jumped by more than 3 million barrels per day (bpd) in May due to surging oil demand.

In May, global oil demand experienced a surging oil demand, surpassing 3 million barrels per day (bpd) compared to the previous month, according to the latest data from the Joint Organizations Data Initiative (JODI).

This increase brought oil demand close to the record levels observed in March. The rise was primarily driven by China, with India, Saudi Arabia, and the United States also contributing to the growth. However, despite the robust demand, concerns about weaker macroeconomic data from China impacted market sentiment. Let’s delve deeper into these developments.

China’s Strong Demand

China played a crucial role in the surge of global oil demand. The JODI data revealed that China’s total oil product demand in May reached 17.37 million bpd, marking a remarkable increase of 1.7 million bpd compared to April. This figure is the second-highest ever recorded by JODI. Additionally, other oil data from China indicated robust demand, as crude oil imports surged by 1.8 million bpd to 12.15 million bpd in May. Furthermore, refinery intake witnessed a significant rise of 1.81 million bpd to 16.38 million bpd during the same period.

Market Sentiment and Production

Despite China’s surging oil demand, the market was influenced by concerns over weaker macroeconomic data from the leading crude oil importer. On Monday, an underwhelming second-quarter GDP reading from China resulted in a more than 1% decrease in oil prices. This decline reflects the market’s sensitivity to macroeconomic indicators.

While demand increased, crude oil production faced a decline of 800,000 bpd due to lower output in Saudi Arabia. The country implemented a 500,000-bpd reduction as part of a 1.6-million-bpd collective cut with other OPEC+ producers. Additionally, the United States and Canada experienced drops in production. In Canada, wildfires in May forced operators to shut down some producing operations as a precautionary measure. Consequently, Canada’s crude oil production fell by 197,000 bpd, reaching a 27-month low.

Inventory Levels

JODI’s data indicated a decline in crude inventories among reporting countries, with a total reduction of 10 million barrels. These inventories stood at 324 million barrels below the five-year average. However, product inventories witnessed a different trend, rising by 32 million barrels and remaining 25 million barrels below the five-year average. This data suggests that while crude inventories are declining, product inventories are increasing.


The global oil market experienced a surging oil demand during May, with a rise of over 3 million bpd compared to the previous month. China played a pivotal role in driving this growth, supported by increases in India, Saudi Arabia, and the United States. However, concerns regarding weaker macroeconomic data from China impacted market sentiment and resulted in a decline in oil prices. Additionally, production drops in Saudi Arabia, the United States, and Canada further influenced the market dynamics. While crude inventories declined, product inventories displayed a contrasting trend. These developments highlight the intricate interplay between demand, production, and market sentiment within the oil industry.

This news is exciting for high net-worth investors

Let’s talk more about the recent supply and demand changes in the oil industry and what they mean for you.

Why is this news so important for high net-worth investors?

surging oil demand is crucial for high net-worth investors because it presents investment opportunities, allows for portfolio diversification, impacts the commodities market, has geopolitical implications, and intersects with the energy transition and ESG investing trends. By staying informed about developments in the oil industry, investors can make informed decisions and potentially maximize their investment returns.

Investment Opportunities

High net-worth investors often seek lucrative investment opportunities to grow their wealth. The news of surging oil demand presents potential investment prospects in the energy sector. With increased demand, companies involved in oil exploration, production, refining, and distribution could experience higher profits, making them attractive investment options.

Portfolio Diversification

High net-worth investors understand the importance of diversifying their investment portfolios to manage risk effectively. Oil and energy-related assets can provide diversification benefits, as they often have low correlation with other asset classes. Therefore, the news of rising oil demand presents an opportunity for investors to diversify their portfolios and reduce exposure to any specific sector or market.

Commodities Market

Oil is a key commodity with a significant impact on global markets. High net-worth investors who actively trade in the commodities market can capitalize on the surge in oil demand by engaging in futures contracts or options trading. By closely monitoring market trends and making informed trading decisions, they can potentially benefit from price fluctuations and generate substantial returns.

Geopolitical Implications

Oil is a highly geopolitically sensitive resource. Any significant developments in the oil market can have far-reaching implications for global politics and international relations. High net-worth investors, who are often well-informed about geopolitical events, can consider the impact of increased oil demand on geopolitical dynamics when making investment decisions. This can help them identify opportunities or potential risks associated with specific regions or countries heavily reliant on oil exports.

Energy Transition and ESG Investing

The surge in oil demand may have implications for the ongoing energy transition and environmental, social, and governance (ESG) investing trends. High net-worth investors interested in sustainable and responsible investing can monitor how increased oil demand aligns with global efforts to reduce carbon emissions and transition to cleaner energy sources. This information can guide their investment decisions, helping them support companies and projects that promote sustainability and align with their ESG objectives.


Paraskova, T. (2023, July 17).Oil Demand Jumped By 3 Million Bpd In May To Near-Record Levels. 

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