Royal Dutch Shell expects global oil demand to return to some sort of normalcy next year, chief executive Ben van Beurden said on Thursday as the supermajor reported another set of weak Big Oil results affected by the pandemic.
“I believe 2022 is going to be sort of back to normal” regarding global oil demand rebounding to the levels seen before the pandemic, Argus quoted van Beurden as saying.
Full recovery of oil consumption will have to wait for a recovery in the aviation industry, Shell’s top executive said.
“Aviation will be a very significant contributor to that remaining recovery that we need to see,” said van Beurden, echoing estimates from analysts who see jet fuel demand as the main drag on global oil demand recovery.
Continued low demand for jet fuel will account for 80 percent of the 3.1-million-bpd gap in oil demand this year compared to pre-pandemic levels, the International Energy Agency (IEA) said in December.
Currently, world oil consumption is still lagging behind 2019 levels by around 5-7 percent, Shell’s van Beurden said, as carried by Argus. Right now, there is a mixed picture of recovery in fuel demand around the world, with consumption in China very strong, according to Shell’s CEO.
Still, the executive is optimistic that global oil demand will see a strong recovery in the second half of this year and reach some sort of normalcy next year.
Van Beurden was speaking after Shell announced an 87-percent plunge in profits for last year, missing analyst estimates.
Commenting on the results, Michael Hewson, chief market analyst at CMC Markets, said:
“Whichever way you look at it these Q4 numbers are disappointing; lower production volumes, reduced cash flow and a rise in net debt. While CEO Ben van Buerden may point to a “extraordinary year”, and the implementation of tough but decisive actions, the reality is there’s not a lot to cheer in these numbers.”
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
- BP Reports Massive Loss For 2020
- Will U.S. Shale Finally Reward Shareholders?
- This Year Will Define The Next Decade In The Energy Industry