COVID-19 results in a 20% decrease in oil demand so far

March 23, 2020
Owning the Energy Transition More...
by Arij van Berkel
Average importance

The oil industry is facing an unprecedented drop in demand as a result of the global measures against COVID-19. While it is too early to assess the impact properly, early indications by traders suggest a 20% drop in demand. The only other time with a demand decrease was in 1980, during the recession following the second oil crisis. That was "just" a mild 5% dent compared to current events. In a sense, the current demand decrease is a preview of demand projections for 2030 and beyond. As an example, Barclays projects a global peak in oil demand between 2030 and 2035 followed by a steady demand reduction. Clients should watch how oil companies respond, as it will reveal vulnerabilities to decreasing demand and consistently low prices.

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