Global oil demand is set to rebound and remain robust for some time, BP’s chief executive Bernard Looney told Bloomberg News on the sidelines of an economic forum in Russia, reiterating views expressed by most forecasters and analysts.
“There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined,” Looney told Bloomberg News at the St. Petersburg International Economic Forum. “I think that the situation we’re in at the moment could last like this for a while,” the top executive of one of the world’s largest oil companies said.
Looney’s assessment of the oil market is similar to the views recently expressed by investment banks such as Goldman Sachs and Barclays, as well as OPEC and the International Energy Agency (IEA).
Goldman Sachs continues to see oil hitting $80 this year, despite the possible return of Iranian oil to the market.
Barclays, for its part, said two weeks ago that global oil demand was recovering with major economies reopening amid a cautious supply approach from OPEC+ and restraint in U.S. shale.
The most recent estimates from OPEC and the IEA – ahead of their respective monthly reports this week – is that oil demand globally is expected to return to pre-COVID levels within a year.
“Demand in one year or so may well come back to the levels of before the crisis,” the IEA’s Executive Director Fatih Birol told Bloomberg last week, noting the strong demand in the United States, Europe, and China.
OPEC+ affirmed last week previous estimates that oil demand is set to grow by 6 million bpd to average 96.5 million bpd this year.
“In fact, we anticipate that demand will surpass 99 mb/d in the fourth quarter, which would put us back in the range of pre-pandemic levels,” OPEC Secretary General Mohammad Barkindo said.
By Tsvetana Paraskova for Oilprice.com
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Yet the CEO of BP was so fast on his feet to tell us during the pandemic that peak oil demand is already behind us and to burnish his company's environmental credentials. How wrong he ihas been?
Oil and gas are here to stay well into the future. Moreover, the notions of a post-oil era, peak oil demand and net-zero emissions are illusions. They aren’t going to happen.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
The thoughtful oil executives will use the short term gain to transfer wealth to technologies with a future rather than making futile plans for a growth that will never come.