According to a report from International Energy Agency (IEA), global oil demand is set for its first annual drop since 2009 due to the spread of the Covid-19 coronavirus.
The agency reported global oil demand for this year stands at 99.9 million barrels per day (mbd). This is a decrease of around 90,000 barrels per day from 2019, the largest fall in a decade.
This prediction is very different to the agency’s February prediction, when it expected annual growth of 825,000 barrels per day.
The report says estimates have declined because of the drop in oil consumption in China, and major interruptions to global travel and trade.
Between 2019 and 2025, the report predicts oil demand will increase by 5.7mbd. In the same period, output capacity is forecast to rise at 5.9mbd, with most coming from non-OPEC sources.
In its latest report, IEA did not include details of the continuing oil price war after Saudi Arabia and Russia failed to agree to continue production cuts recommended by OPEC Group.
Oil demand drop follows Chinese consumption
IEA executive director Fatih Birol said: “The coronavirus crisis is affecting a wide range of energy markets, including coal, gas and renewables, but its impact on oil markets is particularly severe because it is stopping people and goods from moving around, dealing a heavy blow to demand for transport fuels.
“This is especially true in China, the largest energy consumer in the world, which accounted for more than 80% of global oil demand growth last year.
“While the repercussions of the virus are spreading to other parts of the world, what happens in China will have major implications for global energy and oil markets.
“The coronavirus crisis is adding to the uncertainties the global oil industry faces as it contemplates new investments and business strategies.”
Meanwhile, the death toll from the Covid-19 virus has increased to more than 4,000 as of the end of 10 March.
The recoveries have increased to around 59,000, while the total confirmed cases worldwide have passed 113,000.
Yesterday, Italy closed its borders to contain the spread of the virus. Italian authorities announced the number of cases in Italy has increased to 9,172 with 463 deaths in the country. The number of recoveries there has increased to 724.
To address coronavirus Covid-19, the World Health Organization (WHO) has published research and development (R&D) roadmap.