This Time is Different. The "COVID-Shock" and Future of the Global Oil Market

Author
Giuliano Garavini
Content Type
Commentary and Analysis
Institution
Istituto Affari Internazionali
Abstract
Oil markets are facing a perfect storm. The scissors of supply and demand are moving against one another, generating increasing pain on the oil industry and the political and financial stability of oil-producing countries. Global oil demand is dropping due to the recession induced by the COVID-19 shut down of economic activity and transport in the most industrialized countries. Goldman Sachs predicts that global demand could drop from 100 million barrels per day (mdb) in 2019 to nearly 80 mdb in 2020.1 If confirmed, this would be single biggest demand shock since petroleum started its race to become the most important energy source in the world.
Topic
International Trade and Finance, Oil, Global Markets, Economy
Political Geography
Russia, Saudi Arabia, Global Focus