Oil demand for 2020 is expected to be around 90.59 mb/d – back to levels last seen before the 2014-2016 market downturn, said Mohammad Sanusi Barkindo, OPEC Secretary General, at the 7th Technical Meeting of OPEC and non-OPEC Countries under the DoC, 4 June 2020, via videoconference, Trend reports.
He noted that based on the latest issue of our monthly in May, the Secretariat projects that the world economy will shrink by 3.4 percent in 2020, following global economic growth of 2.9 percent the previous year.
“World oil demand growth in 2020 is expected to drop by a staggering 9.07 mb/d, with the worst impact seen in this quarter. We expect demand for the year to be around 90.59 mb/d – back to levels last seen before the 2014-2016 market downturn,” said Barkindo.
OPEC secretary general noted that along with dire economic projections across the board, the cartel sees very worrying signs regarding the effect the current crisis will have on investment in the oil industry. “We are already experiencing a repeat of the 2014-2016 scenario, when many petroleum companies applied for bankruptcy. Many others are teetering on the edge of failure.”
He went on to add that non-OPEC countries will receive a massive blow, with CAPEX projected to drop by a whopping 23 percent y-o-y in 2020, to about half the $741 billion record set in 2014.
“Bringing stability back to the oil market will help protect the highly skilled jobs, innovation and advances in efficiency that are needed now more than ever, for both the world’s economies and the oil industry to recover. DoC countries, in particular, which rely so heavily on the oil industry, may be faced with pulling back on essential diversification efforts. These are the same countries that will be hardest hit by the energy transition,” Barkindo added.
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