Severely depressed oil demand is likely to cause distress across the industry and drive short-term declines in US shale, IEA director Fatih Birol says. Travel restrictions to combat the coronavirus have led some to forecast oil demand could drop by 20mn b/d, Birol says. This would have a greater efect on global markets than plans by Saudi Arabia, Russia and other Opec+ agreement signatories to increase production by 2mn-3mn b/d, he says. The overhang in supply, combined with lower demand, will have consequences for years, Birol says, causing large declines in US shale oil production and economic distress for oil-dependent countries. “What the producing countries do, and will do, is very important,” Birol says. “But as important as that, if not more important, there is a huge drop, free fall, of oil demand.”
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