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A man fishes near docked oil drilling platforms, in Port Aransas, Texas. A man fishes near docked oil drilling platforms, in Port Aransas, Texas, May 8, 2020 (AP photo by Eric Gay).

The Coronavirus Pandemic Has Changed Oil Markets Forever

Tuesday, May 19, 2020

Oil demand has fallen precipitously in recent months due to lockdowns and other measures that governments around the world have undertaken in response to the COVID-19 pandemic. The International Energy Agency reckons that oil demand will fall by a record 9.3 million barrels per day in 2020, erasing nearly a decade of growth. With the crisis having rattled oil markets that were already struggling to adapt to structural challenges on both the demand and supply side, the world should brace for the geopolitical impacts of historically low demand for oil.

It will take years before demand returns to pre-coronavirus levels of roughly 100 million barrels a day—if it ever does. The CEOs of Europe’s two largest oil companies, Royal Dutch Shell’s Ben van Beurden and BP’s Bernard Looney, have suggested that oil demand might never fully recover. While many countries would gladly return to their pre-pandemic ways of life just as quickly as they can, three factors cast doubt over the prospect of oil’s recovery. ...

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