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Bloomberg
The oil market will suffer a long-lasting blow from the coronavirus, with demand taking years to recover and peaking at a lower level, the International Energy Agency (IEA) said.
After an unprecedented 8% drop this year, global oil consumption will return to pre-crisis levels in 2023, provided Covid-19 is brought under control next year, the Paris-based agency said on Tuesday.
Even in that case, which is the most optimistic scenario for oil considered by IEA, the pandemic has an enduring impact. The IEA reinforced its view that global oil demand will plateau around 2030, topping out at lower levels than forecast last year.
Long-term growth in oil demand will be tamed by the switch to more efficient or electric vehicles, the IEA forecast. Consumption will rise by about 750,000 barrels a day each year to hit 103.2 million a day in 2030. That’s about 2 million a day less than predicted in last year’s report.
The increase will be entirely concentrated in developing nations — most notably India — and dominated by feedstocks for plastics and other petrochemicals, rather than fuel for road transportation. After 2030, annual growth will dwindle to just 100,000 barrels a day.
“The era of global oil demand growth will come to an end in the next decade,†IEA Executive
Director Fatih Birol said in the agency’s annual World Energy Outlook.
If the recovery from the pandemic is slower and there’s lasting economic damage, oil demand may only have a couple of years left to grow, the IEA said.
The outlook from the agency, which advises most major economies, comes as oil majors like BP Plc and Royal Dutch Shell Plc acknowledge that combination of the pandemic with and the drastic changes required to avert a climate crisis will have profound consequences for their assets and business models.