press release

Shock COVID-19 demand update: Oil seen down 2.8%, jet fuel down 12%, road fuel down 2.2% in 2020

March 18, 2020

Rystad Energy is creating a weekly comprehensive report calculating the effect of the novel coronavirus in our lives and updating estimates for global fuel markets.

As a result of recent developments, with travel restrictions and quarantine obligations being announced daily around the world, we are making substantial frequent updates to most of our estimates.

Global oil demand:

In a shocking revision of last week’s estimates, our newest forecast for oil demand now projects a decrease of 2.8%, or 2.8 million barrels per day (bpd) year-on-year. Our estimates show that total oil demand in 2019 was approximately 99.9 million bpd, which is now projected to decline to 97.1 million bpd in 2020. To put the number into context, last week we projected a decrease of just 600,000 barrels.

At the moment we expect the month of April to take the biggest hit, with demand for oil falling by as much as 11 million bpd year on year,

This downgrade takes into account developments that happened within the course of last week such as the new quarantine lockdowns across Europe and the declaration of a state of emergency in the US, as well as our updated simulations of the virus’ growth patterns this year.

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Road fuel demand:

We believe that global demand for road fuels will fall by 2.2%, or 1.1 million bpd year-on-year, a strong downgrade from last week’s report, where road fuels were expected to stay mostly flat.

Road fuel demand in 2019 is estimated to have reached 49.7 million bpd. Prior to the coronavirus we expected this demand segment to grow to 50.3 million bpd in 2020, but we now see it reaching only about 48.6 million bpd.

Almost all of this reduction will occur due to decreased road traffic in the first half of 2020. In China alone, demand for gasoline and diesel road fuel was down by about 1.5 million bpd in February. Traffic in the country is now gradually returning to more normal levels.

Jet fuel demand:

Among the various fuel sectors, we expect jet fuel to be hit the hardest. We expect global commercial air traffic will fall by approximately 20% this year versus the levels seen in 2019, which we estimate stood at around 99,700 flights per day.

Many distressed airlines are now facing heavy cost cuts, laying-off unprecedented numbers of employees and many non-essential routes are likely to be closed.

As a base case we now assume that the common summer air travel peak will not occur at all this year. We now see jet fuel demand falling by 12% year-on-year, equating at least 800,000 bpd. Last year’s demand for jet fuel was seen at about 7.2 million bpd.

The annual estimates assume no additional lockdowns and fewer flight cancellations after the summer.

Other report findings:

The COVID-19 Report, aside from energy related projections, also includes general estimates regarding the spread and development of the pandemic globally and some of our forecasts of how it will evolve in the countries that are most affected.

Our numbers will be adjusted weekly for every new dramatic step taken by governments to slow the spread of COVID-19.

The latest updated version of the report will always be publicly accessible by clicking HERE or via the following web address:

https://www.rystadenergy.com/globalassets/pdfs/covid-19-report-week-12.pdf

We in Rystad Energy would like to extend our best wishes for good health to the wider public.

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Contacts

Per Magnus Nysveeen
Head of Analysis
Phone: +47 24 00 42 00
per@rystadenergy.com

 

Lefteris Karagiannopoulos
Media Relations Manager
Phone: +47 90228994
lefteris.karagiannopoulos@rystadenergy.com

 

About Rystad Energy
Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Our products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike. Rystad Energy’s headquarters are located in Oslo, Norway with offices in London, New York, Houston, Aberdeen, Stavanger, Moscow, Rio de Janeiro, Singapore, Bangalore, Tokyo, Sydney and Dubai.