Global oil demand will not return to pre-corona crisis levels until 2022 at the earliest. This was reported by the International Energy Agency (IEA) in a new report on the oil market. Demand for oil has come under severe pressure from the crisis and measures to address the coronavirus outbreak.
The organization says that the drop in oil demand was somewhat less than feared due to the lockdown measures. However, demand is expected to contract at the strongest pace ever this year, at 8.1 million barrels per day. In 2021, this demand should pick up again at a record rate of 5.7 million barrels per day. World fuel consumption may be somewhat lower than before the crisis, mainly due to weaker demand for aviation kerosene, the IEA said.
The IEA further writes that the oversupply in the oil market will diminish in the near future due to production restrictions on the oil cartel OPEC and its allies such as Russia. Lower oil production in the United States will also help counteract the oversupply.