July 05, 2020: Although crude prices have rebounded from coronavirus crisis lows, oil execs and experts are starting to ask if the industry has crossed the Rubicon of peak demand.
The plunge in the price of crude oil during the first wave of coronavirus lockdowns — futures prices briefly turned negative — was due to the drop in global demand as planes were parked on tarmacs and cars in garages.
The International Energy Agency (IEA) forecast that average daily oil demand will drop by eight million barrels per day this year, a decline of around eight percent from last year.
While the agency expects an unprecedented rebound of 5.7 million barrels per day next year, it still forecasts overall demand will be lower than in 2019 owing to ongoing uncertainty in the airline sector.
Some are questioning whether demand will ever get back to 2019 levels.
“I don't think we know how this is going to play out. I certainly don't know,” BP's new chief executive Bernard Looney said in May.
The COVID-19 pandemic was in full swing then with most planes grounded and white-collar workers giving up the commute to work from home.
“Could it be peak oil? Possibly. I would not write that off,” Looney told the Financial Times.