Global oil demand to decline this year because of the coronavirus
International Energy Agency, IEA, said it expects global oil demand to decline this year – for the first time since 2009 – as the impact of the new coronavirus (COVID-19) spreads around the world, constricting travel and broader economic activity.
The situation remains fluid, creating an extraordinary degree of uncertainty over what the full global impact of the virus will be, the agency added in a statement.
The short-term outlook for the oil market will ultimately depend on how quickly governments move to contain the coronavirus outbreak, how successful their efforts are, and what lingering impact the global health crisis has on economic activity. All the details of our new forecast can be found in the March edition of the agency's Oil Market Report.
- The coronavirus crisis is affecting a wide range of energy markets – including coal, gas and renewables – but its impact on oil markets is particularly severe because it is stopping people and goods from moving around, dealing a heavy blow to demand for transport fuels, said Dr Fatih Birol, the IEA’s Executive Director.
- This is especially true in China, the largest energy consumer in the world, which accounted for more than 80 percent of global oil demand growth last year. While the repercussions of the virus are spreading to other parts of the world, what happens in China will have major implications for global energy and oil markets.
Global oil demand is expected to decline in 2020 as the impact of the new coronavirus spreads around the world, yet the situation remains fluid, creating an extraordinary degree of uncertainty over what the full global impact of the virus will be.
In addition to the base case described above, and to account for the extreme uncertainty facing energy markets, the IEA has developed two additional scenarios for how global oil demand could evolve this year.
In a more pessimistic low case, global measures fail to contain the virus, and global demand falls by 730,000 barrels a day in 2020. In a more optimistic high case, the virus is contained quickly around the world, and global demand grows by 480,000 barrels a day.
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