Yesterday, the International Energy Agency expected oil demand to decline 8% this year, noting that the slow economic recovery from the pandemic threatens to delay the full recovery of global energy demand to 2025. The agency’s annual Global Energy Outlook report stated that the basic expectations are based on reaching a vaccine. A treatment for Corona could mean a global economic recovery in 2021 and energy demand in 2023.
The agency, which advises Western governments on energy policy, added that the timeframe would be delayed by two years in the case of a “delayed recovery scenario”, and in this case, it expects “a deeper short-term downturn that undermines the potential growth of the economy and a high unemployment rate that depletes human capital, bankruptcies and economic changes.” A structure that leads to the cessation of production from some of the present assets.
The Paris-based agency expects a 5% decline in global energy demand in 2020, energy-related carbon dioxide emissions 7%, and 18% investment. Demand for oil is heading for a decline of 8% and for coal by 7%, while renewable energy will rise slightly. Fatih Birol, head of the agency, said policy makers were left behind, saying, “We are far from reaching the climate goals under the existing policies around the world.”
The agency warned that uncertainties about the future of demand and a drop in oil prices in 2020 may mean a lack of confidence of producers about how to evaluate investment decisions, which leads to an imbalance between supply and demand and provokes fluctuations in the market in the future. The agency predicts an increase in investment in upstream activities from its low level in 2020, supported by an increase in the price of oil to $ 75 a barrel by 2030.