Global oil demand is set to contract in 2020 for the first time in more than a decade as global economic activity stalls due to the coronavirus, the International Energy Agency said.
The energy watchdog said it expected oil demand to be 99.9 million barrels per day (bpd) in 2020, lowering its annual forecast by almost 1 million bpd and signaling a contraction of 90,000 bpd, the first time demand will have fallen since 2009.
Global oil demand fell 2.5 million bpd on the year in the first quarter, or around 2.5%, the IEA estimated in its report, as coronavirus cut travel and economic activity.
The Paris-based IEA said in its medium-term outlook report that in an extreme scenario where governments fail to contain the spread of the coronavirus, which has affected over 100,000 people, consumption could drop by up to 730,000 bpd.
IEA Executive Director Fatih Birol urged producers to “behave responsibly” in the face of the coronavirus crisis, after a deal on output restraint between OPEC, Russia and other producers collapsed last week, sending oil prices plunging.
“At such a time of uncertainty and potential vulnerability to the world economy ... playing Russian roulette with the oil markets may well have grave consequences,” Birol told reporters.
Birol said the low oil prices could put many major crude producing nations such as Iraq, Angola and Nigeria under “huge” financial strain and fuel social pressures.
While oil demand is set to gyrate sharply, the IEA kept its forecast for global oil supplies largely unchanged, with production capacity set to grow by 5.9 million bpd by 2025, marginally outpacing demand.