In its monthly report, OPEC is maintaining its forecast for world demand, predicting a rise to pre-pandemic levels globally. However it said Russia’s invasion of Ukraine and potential flareups of the Coronavirus pose risks. The report predicts a worldwide demand increase of 2.26 million barrels per day in 2022.

OPEC wrote, “Looking ahead, current geopolitical developments and the uncertain roll-out of the pandemic toward the end of the second half of the year continue to pose a considerable risk to the forecast recovery to pre-pandemic levels. Inflationary pressures are likely to persist and it remains highly uncertain as to when geopolitical issues may be resolved. Nevertheless, oil demand is forecast at healthy levels in the second half of this year.”

The report goes on to predict world consumption will exceed the 100 million barrel per day level in the third quarter, consistent with other projections. It sees the 2022 average to land at 100.29 million barrels per day, slight more than the rate prior to the COVID pandemic.

The war in Ukraine caused the price of oil to briefly surpass $139 per barrel in March, the highest since 2008. That set off worsening inflation in the US, which triggered reaction from the Federal Reserve, spooking markets. Meanwhile on the other side, COVID lockdowns in China as a result of its strict zero-COVID policies, have stifled demand as they have shut down economic activity and travel.

OPEC and the allied nations, or OPEC+ agreed in their last meeting to increase output to make up for shortfalls produced by Russian sanctions and increased prices from the war in Ukraine. However critics say the Cartel has been missing quota levels due to individual countries underinvesting in oil fields, and Russian sanctions limit Russian sales.

According to the report, May’s OPEC output was down 176,000 barrels per day, at 28.51 million barrels per day.