1.Global oil demand is projected to rebound by 6.1% in 2021 to 97.2m bpd, following a -8.7% y-o-y drop in 2020. 2.Though Covid-19 'lockdown' measures are still in force in many countries, the impact on economic activity in recent months is expected to have been more limited than in the first 'lockdowns' in early 2020. While demand for transportation fuel remains under pressure from continued mobility restrictions, petrochemical feedstock and industrial fuel demand is expected to have been relatively firm. That said, renewed restrictions and a slow vaccine rollout in Europe has weighed on oil demand in the region in Q1. 3.Projections for 2022 suggest that global oil demand will grow by 3.0% y-o-y to 100.1m bpd, c.0.2m bpd below 2019 levels. Demand is projected to continue to recover in all regions, with the firmest expansion expected in Asia (5% in India, 4% in China). 4.However, as the global shift towards renewables gains momentum, oil demand will be placed under growing pressure into the long-term. Scenarios for a 'gradual transition' in the global energy mix suggest oil use may peak in the 2030s, while in a scenario aligned with 'rapid decarbonisation', oil demand may never fully return to pre-pandemic levels.
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