Torbjorn Tornqvist, the CEO of trading company Gunvor, said oil demand is running about 5 million to 6 million bpd below the pre-pandemic levels and would likely take at least a year to recover to 2019 levels. Tornqvist also said that OPEC+ were likely to extend its current supply curbs into the first quarter of 2021. Global oil demand plunged by a third in April, while prices collapsed as millions of people were forced to stay at their homes to contain the pandemic.
The recovery in fuel consumption has stalled as European economies returned to lockdown to tackle resurging COVID-19 cases. Tornqvist said a vaccine would not change the situation instantly and the market had to wait at least a year. According to Tornqvist, Gunvor has worked through over 50% of the oil inventories from the spring build-up. However, the withdrawal rate was modest, at less than 2 million bpd for both crude and oil products.
The oil price collapse has accelerated transition toward low-carbon energy, with many European oil giants cutting spending on fossil fuel projects. Gunvor has also planned that in the next few years, it would invest 10% of its equity in non-CO2 energy sources. Tornqvist said good form of investments included smart grids and large-scale battery technology.
