No industry is immune from the impacts of COVID-19, including oil. With news that oil demand is down 20% as a result of the virus, Arij van Berkel, Lux Research director, notes that:
“The oil industry is facing an unprecedented drop in demand as a result of the global measures against COVID-19.”
According to her, “While it is too early to assess the impact properly, early indications by traders suggest a 20 percent 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 percent 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. We should watch how oil companies respond, as it will reveal vulnerabilities to decreasing demand and consistently low prices.”
– Mar. 24, 2020 @ 16:05 GMT |