Global oil demand is going down as the coronavirus compels people around the world to remain indoors and avoid all unnecessary travel. Currently, more than half of the world’s population is under lockdown, meaning there is less demand for oil. The coronavirus crisis is adding to the uncertainties to the global oil industry.
Covid-19 pandemic has left the oil industries into pieces bringing huge losses to the people involved in the oil extraction and processing business. The Organization of Petroleum Exporting Countries and its allies, had a meeting via video conference on Thursday which concluded to cut down production by 10 million barrels a day.
The coronavirus crisis is affecting wide range of industries from small scale to large scale but it has shown quite severe effects on oil industries because there is no permission for import or export of goods. China is the best example to understand this problem as it is the largest cosumer in the world use about 8-% of the global oil demand. The impact of the coronavirus on oil markets may fade away with time. But the longer-term challenges facing the world’s suppliers are not going to go away.
India, China and the U.S. account for about 40% of global oil demand.
China is the world’s largest oil importer. The country consumes about 14.7 million barrels a day which is more than the needs of France, Germany, Italy, Spain, the U.K., Japan and South Korea alltogether. China’s oil demand was increased from 5.6 million barrels per day in 2003 to 14.7 million bpd in 2019, and it accounts over 80 percent of global oil demand growth. The country imports about 10 million bpd of crude oil.
To tell about how much has the consumption gone down is quite impossible, but we expect the fall somewhere between 10 million and 20 million barrels a day and it might get worse says the traders. U.S. oil demands have gone down to 14.4 million barrels a day, the lowest ever since 1990.the demand would climb up to 16.7 million barrels a day in April.
India is world’s third-biggest consumer of oil and its demand has gone down by 70% as India endures the largest national lockdown amongst all. Consumption for the entire month could average about 60% below last year’s levels but that’s based on India’s three-week lockdown ending on April 30 as planned, according to the government. That’s 3.9 million barrels a day of lost oil demand.
Canada’s production for oil is more than its consumption. Canada’s share in the global oil demand is much less, about 2% of global oil demand. Canada is most affected by this pandemic and it shuts down all the supply. Till date, Canada have approximately shut at least 325,000 barrels a day.
In Spain, one of the most suffered countries by the disease, oil product demand have fallen to 23% in March. Travelling is not allowed in the country due to lockdown causing limited use of fuels. Air and road fuel consumption were the most affected, with gasoline and road diesel falling by 35.5% and 26.5% respectively.
The U.K. consumes 1,583,896 barrels per day (B/d) of oil as of the year 2019. Uk ranks 15 in the world according to its consumption rate. It cumsumes about 1.6% of global oil demand per day. Most of the consumption of U.K. accounts for transport,specially road transport which is now limited due to lockdown admist covid-19 pandemic. Due to these reasons the consumption rates have fallen down to 1.62 billion barrels per day. Uki to continue lockdown for 5 months,which will see the graph falling even more.Gasolin and diesel sales went down by 66% and 57% respectively.