Vaccine applications brighten the outlook for global oil demand. But while the underlying principles seem stronger, increased cases in countries consuming some large volumes of oil suggest that recovery can be fragile.

Despite concerns about new waves of the virus derailment, the massive collapse of global oil inventories during last year’s COVID-19 demand shock is coming to an end, vaccine campaigns are accelerating and the global economy is settling on a healthier ground.

It is predicted that global oil demand and supply will rebalance in the second half of the year and producers may need to pump 2 million more barrels a day to meet the expected demand.

OPEC, and his allies including Russia, are likely expected that they will prove that they can adapt their output to demand in accordance the virus will be under control or not.

The monthly supply calibration of the block can provide the flexibility to meet the increasing demand by rapidly increasing or adjusting output lower if the recovery of demand does not accelerate.

Commercial oil stored in OECD countries fell for the seventh time in a row in February and demand increased. Imports are also expected to increase in the near future.

As the differences between countries with fast access to the vaccine and those who do not become more clear, less developed countries appear to be more exposed to the demand shock created by COVID-19. These countries are more vulnerable, against the new waves of COVIDs slowing economic activity and mobility.

By the way, currently the situation is unfortunately deteriorating sharply for some major non-OECD oil consumers (such as Brazil, Iran and India).