On Tuesday, oil company Equinor estimated the global oil demand to peak sooner than expected due to the impact of the coronavirus pandemic.
The company saw oil demand to peak by around 2027-2028, two years earlier than its previous forecast. By 2025, according to Equinor, oil demand might return to the level pre-pandemic, of around 100 million bpd. By 2050, oil demand would likely slump to 88 million.
The future demand growth could possibly be weighed down by supply constraints on the back of underinvestment. In 2020, oil firms have been slashing investment by roughly 30%. Equinor estimated that it may affect the previously-assumed billions of barrels of oil recoverable to not be able to be developed. This could eventually lead to the oil demand peak at around 2027-2028.
Equinor foresaw that the pandemic has affected the way people work and travel, which could pose a long-lasting impact and hinder the growth of oil demand with the acceleration of the deployment of renewable energy and electric cars.
The company estimated that in the upcoming few years, the global oil market would be well supplied. Oil producers’ groups might still need to control their output for some more time.
Previously in 2019, Equinor predicted demand peaking just before 2030 at 105 million bpd and dropping to 93 million bpd. The prediction was assumed on the use of electric cars which hampers demand for fossil fuels.
