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Alexander Novak: Oil Demand Will Recover by the End of 2021

Foto: Valdai discussion club

The Minister of Energy of Russia Alexander Novak predicts that demand for hydrocarbons will recover after the coronavirus crisis no sooner than the end of 2021. He also considers this to be an optimistic scenario.

According to Interfax, at the international conference "Global Energy and International Political Risks", organised by the Valdai Discussion Club, Novak noted that the COVID-19 pandemic led to the fact that remote work has become permanent for a lot of people, which in turn will reduce the demand for fuel.

In addition, many oil and gas companies have announced a shift to carbon neutrality, which means that the share of hydrocarbons in the global energy mix is declining in favor of renewable energy sources.

According to Novak, the balance of oil supply and demand in the global market may adjust in July. The overall global reduction of oil production under the reached agreements is currently 3.5 million barrels per day.

He said that the sharp decline in demand for oil during the pandemic affected the growth of reserves. "In my estimation reserves grew by 1 billion barrels during this period," Novak said.

The Minister also sees the risks of a second wave of the pandemic. "This, of course, may have a negative impact on the development of the situation in general, the recovery of economic activity," said Novak.

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