The global oil market may rebalance by 2021; Industry Leaders

By Rahul Vaimal, Associate Editor
  • Follow author on
Oil Production
Representational Image

Leading energy market researcher and analyst Energy Intelligence has quoted Mr. Amin Hassan Nasser, CEO of Saudi Aramco stating that the global oil demand is expected to revert back to pre-pandemic levels by 2022 amid an anticipated supply shortage.

The Saudi Aramco CEO remarked that much of the onus of recovery will be placed on China which is expected to account for the largest demand recovery along with other developing nations in East Asia and across the globe.

Mr. Nasser warned that widespread cost-cutting across the sector will result in a long term supply deficit while the demand recovers.

Occidental Petroleum expects the recovery to happen early 

While speaking to the Energy Intelligence Forum, Occidental CEO Vicki Hollub observed that US crude oil is expected to grow slightly in the next year. Mr. Hollub attributed the steep crude oil price decrease amid the pandemic to the excess supply which was existing in the market before COVID-19 hit the world economy.

The chief executive observed that even though the global oil demand has caught back to around 94 million bpd, it is expected to take longer to reach the 100 million bpd mark with peak supply happening before peak demand occurs.

The outlooks shared by both senior leaders at these energy powerhouses are in line with the global oil demand outlook evaluated by the International Energy Agency (IEA).

IEA expects the global oil demand, which witnessed its steepest drop since World War 2 at 5 percent, only to recover back at pre-pandemic levels by 2023.

The agency stated that the pandemic has pushed the oil demand growth by another two and a half years as developing economies such as China and India will drive the demand for oil after advanced economies like the US and the European Union have already attained peak demand.

In its annual outlook report, IEA expects the global oil demand to peak and then plateau in the 2030s. The Paris-based organization observed that the global economy is expected to be w7 percent smaller than what it had anticipated last year.