International Energy Agency Bullish About Oil Recovery

While the global oil industry is still coming to terms with the crash in oil prices observed since March 2020, the Executive Director of the International Energy Agency (IEA), Fatih Birol, is optimistic about the future perspectives for the demand of the commodity.

In an interview with Bloomberg, Mr. Birol said “In the absence of strong government policies, a sustained economic recovery and low oil prices are likely to take global oil demand back to where it was, and beyond.”

According to the head of the IEA, the coronavirus-related slump in oil demand is only temporary, and the dip in consumption in 2020 should be reversed as of 2021. In line with its previous predictions, the IEA expects oil consumption to reach its plateau in the 2030ies.

Contrary to what happened after the 2008 global financial crisis, the IEA, which advises governments on oil policy, believes that current economic stimulus packages should also promote structural reforms to reduce emissions in line with global targets set out by agreements such as the Paris Agreement.

The IEA’s bullish stance should be contrasted against the perspectives of other leading stakeholders in the sector. The heads of global oil majors such as British Petroleum (BP) and Royal Dutch Shell have expressed more conservative views in light of the global economic uncertainty surrounding the Covid pandemic.

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