Oil demand could collapse by 20 million bpd, says Vitol chief

Oil demand could plummet by 15 to 20 million barrels per day (bpd) in the next few weeks according to Russell Hardy, chief executive of the world’s largest oil trader Vitol.

Hardy told Bloomberg in an interview that this steep drop-off would contribute to an overall demand decline of five million bpd for the year, as the world battles the COVID-19 (coronavirus) pandemic.

Governments around the world are restricting movement of citizens to quell the spread of the virus, with India the latest nation to order a nationwide lockdown. Hardy noted that this would translate into a further substantial decline in oil demand.

In addition, Hardy pointed to growing oil stockpiles in the US, Europe and India as refineries continue to cut output in response to the falling demand. So far, the cuts equate to around 7 million bpd, he said.

Oil analytics firm OilX earlier this week calculated there are about 750 million barrels of crude in storage globally, with analysts expecting this to rise to as much as one billion barrels.

Brent crude is currently trading at around US$28.84 a barrel, down from $66 per barrel at the start of the year. Consultancy group Rystad Energy warned earlier this week that the price could fall to $10 a barrel if the world runs out of storage space.