KUALA LUMPUR (June 22): Global oil markets will likely remain tight and supportive of higher prices well into 2023 as demand continues to recover from COVID-19 lows despite growing concerns over a global recession.

Citing Russel Hardy, the CEO of oil trader Vitol, S&P Global Commodity Insights on Tuesday (June 21) said Vitol still expected to see some two to three million b/d of global oil demand growth in 2023 despite concerns over "runaway prices", with oil supplies struggling to keep up with the increase.

Speaking at the Qatar Economic Forum in Doha, Hardy said it is tough to see markets really giving up much ground until we see some abatement in demand. We are still really not back to 2019 demand levels for gasoline and jet fuel. All in all, that is fairly supportive of prices.

S&P said Hardy reiterated recent comments that the current oil supply shortage was a result of chronic underinvestment in recent years which will underpin tight fundamentals for years to come.

But record-high pump prices were the near-term focus of concern, he said, noting low stocks and a lack of available refining capacity.

"The solution is more refineries, running more crudes, to produce more products.

"The world can solve the problem but things are a little bit tight at the moment,” he said.

He said in addition to low global oil product inventories, China's struggle to contain COVID-19 outbreaks meant its refineries were being underutilized, hitting levels of Chinese oil product exports.