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OPEC Sticks To 2024 Oil Demand Growth Forecast But Trims Q1 View

On Tuesday, OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024, despite lower-than-expected use in the first quarter, saying travel and tourism would support consumption in the year’s second half.

The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

OPEC’s report is the latest to flag robust oil market conditions heading into the second half of the year. Oil rose 3 per cent on Monday after Goldman Sachs said transport demand would push the market into a third-quarter deficit.

OPEC said steady global economic growth has continued in the first half of 2024 and forecast that world oil demand would rise by 2.3 million bpd in the second half.

“Globally, the services sector maintains a stable momentum,” OPEC said.

“It is projected to be the main contributor to the economic growth dynamic in the second half of 2024, particularly supported by travel and tourism, with a consequent positive impact on oil demand.”

OPEC+, which groups OPEC and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. The group agreed on June 2 to extend the latest cut of 2.2 million bpd until the end of September and gradually phase it out from October.

Oil was steady after the OPEC report was released with Brent crude edging down towards $81 a barrel.

The International Energy Agency, which represents industrialised countries, expects much lower demand growth than OPEC of 1.1 million bpd and is scheduled to provide an update on its view on Wednesday.

Goldman Sachs said on Monday that solid summer transport demand will push the oil market into a third-quarter deficit of 1.3 million bpd. Figures in OPEC’s report imply an even larger gap between supply and demand.

OPEC projects demand for OPEC+ crude, or crude from OPEC plus the allied countries working with it, at 43.6 million bpd in the third quarter, much more than the group is currently pumping, according to the report.

The OPEC+ group pumped 40.92 million bpd in May, the report said, citing figures from secondary sources. That marked a drop of 123,000 bpd from April with declines in Russia and Kazakhstan offsetting increases in Nigeria and smaller African producers.

Attacks On Data Centers In UAE And Bahrain Highlight Digital Infrastructure Risks

Recent drone attacks linked to Iran have struck data center facilities in the United Arab Emirates and Bahrain, raising concerns about the vulnerability of digital infrastructure in conflict zones. Facilities operating within the cloud network of Amazon Web Services were among the targets. These incidents highlight how modern conflicts increasingly extend beyond traditional military assets to include critical digital infrastructure.

Critical Infrastructure In The Crosshairs

Iranian drones struck two data centers in the United Arab Emirates on Sunday. A separate strike in Bahrain also affected infrastructure connected to regional cloud operations. The attacks occurred amid escalating tensions following U.S. and Israeli strikes on Iranian targets. Analysts say the incidents demonstrate how data centers are becoming strategic assets in geopolitical conflicts. Patrick J. Murphy, executive director of the geopolitical advisory unit at Hilco Global, said the attacks reflect a broader shift in how infrastructure is viewed in modern security planning. In his view, digital assets now carry strategic importance comparable to energy systems and telecommunications networks.

Industry Response And Strategic Repercussions

Companies operating cloud services in the region responded quickly to the disruptions. Organizations relying on Amazon Web Services infrastructure were advised to move workloads to alternative regions where possible. Major technology providers, including Microsoft and Google, have also reviewed contingency procedures following the incidents. The situation has underscored the importance of redundancy and geographic diversification in cloud infrastructure. Government authorities increasingly classify data centers as critical national infrastructure. Policymakers in the United States, the United Kingdom and the European Union have introduced measures aimed at strengthening the protection of digital assets. Security analysts expect the recent attacks to accelerate efforts to integrate cloud infrastructure into national security planning alongside sectors such as energy, water and telecommunications.

Developments And Industry Reactions

The events also come amid wider debates about the relationship between technology companies and national security policy. In a separate development, the U.S. government recently designated technology company Anthropic as a potential supply chain risk. The company’s chief executive, Dario Amodei, has indicated that the designation could face legal challenge. Technology firms with major operations in the Middle East are reassessing risk management strategies. Expanded multi-region data replication and stronger backup systems form part of these measures, according to Scott Tindall of Hogan Lovells. Meanwhile, comments from OpenAI chief executive Sam Altman have reignited discussion about the growing links between technology companies and government defence programmes.

Looking Ahead

The recent drone strikes illustrate the increasing strategic importance of digital infrastructure in global security dynamics. Data centers are gradually being treated as critical assets within geopolitical conflicts. Continued tensions are likely to prompt additional investment by governments and technology companies in strengthening protection of cloud infrastructure and improving operational resilience across global networks.

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