Oil consumption may never return to levels seen before the coronavirus crisis took hold, BP said in a report on Monday
BP Plc said in a report that the growth of oil demand is over, becoming the first major oil firm to call the end of an era many thought would last another decade or more.
The reports most bullish scenario sees demand no better than “broadly flat” for the next two decades as the energy transition shifts the world away from fossil fuels.
Just six months after taking the top job, Chief Executive Officer Bernard Looney said in August he’d shrink oil and gas output by 40% over the next decade and spend as much as $5 billion a year building one of the world’s largest renewable power business.
The report considers three scenarios, which aren’t predictions but nevertheless cover a wide range of possible outcomes over the next 30 years.
The “Rapid” approach sees new policy measures leading to a significant increase in carbon prices. The “Net Zero” course reinforces Rapid with big shifts in societal behavior, while the “Business-as-usual” projection assumes that government policies, technology and social preferences continue to evolve as they have in the recent past.
In the first two scenarios, oil demand falls as a result of the coronavirus, the report shows. “It subsequently recovers but never back to pre-Covid levels,” according to Spencer Dale, BP’s chief economist. “It brings forward the point at which oil demand peaks to 2019.”