IEA expects global oil demand to fall 9.3 mbpd in 2020 on coronavirus concerns

Global oil demand is expected to fall by a record 9.3 million barrel per day (mbpd) year-on-year (YoY) in 2020 as mobility came to a halt due to the impact of containment measures in 187 countries and territories, the International Energy Agency (IEA) said in its latest Oil Market report.

Demand in April is estimated to be 29 mbpd lower than a year ago, down to a level last seen in 1995, the report noted.

Global oil supply is set to plunge by 12 mbpd in May, after OPEC+ forged an output deal to cut production by 9.7 mbpd from an agreed baseline level.

“The measures announced by OPEC+ and the G20 countries won’t rebalance the market immediately. But by lowering the peak of the supply overhang and flattening the curve of the build-up in stocks, they help a complex system absorb the worst of this crisis,” IEA said.

The energy watchdog further noted that the decisions taken by OPEC+ and the G20 should help bring the oil industry back from the brink of an even more serious situation than it currently faces.

For the second quarter of 2020, demand is expected to be 23.1 mbpd below year-ago levels, IEA added, noting that the recovery in H2 2020 will be gradual.