On Wednesday, the International Energy Agency (IEA) said that in 2020, the global energy investments might plunge by about 20% or USD400 billion due to the coronavirus-related crisis.
At the start of this year, global energy investments were on the way to see the biggest growth in six years, by 2%. In 2019, the investments in the sector were totaled USD1.8 trillion.
The plunge in investment is dubbed to be the biggest fall on record and could have serious repercussions for energy security and the transition to clean energy. It could lead to job losses and diminishing economic opportunities.
Other than that, there is also a risk of deteriorating energy supplies when the economy recovers in the future, said IEA’s Executive Director Fatih Birol.
Investments in oil and gas are likely to slump by about one-third this year as global energy firms have shelved projects and slashed investments to shore up finances. There is also a possibility of higher debts after the crisis, which would last in harming investments.
If the oil investments stay at 2020 levels, by 2025 the level of global supply would shrink by nearly 9 million bpd. If the demand recovers back to the levels before the crisis, the world will probably see a tighter market.
As the energy demand and prices have both tumbled, governments and industries might see plummeting revenue by roughly USD1 trillion this year.
