Global oil demand could exceed pre-crisis levels, says IEA boss

Low oil prices and a sustained economic recovery could bring global oil consumption back to pre-crisis levels and beyond, according to the International Energy Agency’s executive director Fatih Birol.

Birol warned governments that the COVID-19 pandemic will only reduce oil demand briefly, with consumption dipping in 2020 to about 91 million barrels a day before rebounding in 2021 and beyond.

This prediction challenges the notion that ‘peak oil’ was reached last year – when the world consumed 100 million barrels of oil per day – and damages hopes that the pandemic would cap demand and result in a long-term reduction in carbon emissions.

“Behavioural changes in response to the pandemic are visible but not all of them are negative for oil use. People are working from home more, but when they do travel, they are more likely to be in cars than public transport,” Birol told Bloomberg News from Paris.

Birol went on to urge governments to use their economic recovery packages to fight climate change and invest in renewable energy to help to achieve the goals set in the 2016 Paris climate agreement.

Keeping the global temperature increase to 1.5 degrees Celsius, as stipulated in the Paris accord, will require annual global emissions to be reduced by about half by 2030 and to hit net zero around the middle of the century.

However, the IEA is sticking to its view that global oil demand will continue to increase over the next decade or so, before reaching a plateau around 2030.

@RGNonline