Modelling a second Covid-19 wave: Oil demand in 2020 could lose another 2.5 million bpd

Modelling a second Covid-19 wave: Oil demand in 2020 could lose another 2.5 million bpd

As the number of confirmed new Covid-19 cases surges to new global highs of beyond 200,000 per day, a second wave of the pandemic is increasingly apparent in several countries - most notably in the United States. Modelling the effect of a wider 'second wave' scenario, Rystad Energy finds that global oil demand in 2020 could be knocked down to 86.5 million bpd, compared to our current base-case estimate of 89 million bpd.

In the second wave scenario, we don't expect the oil demand impact to be as strong as was seen in the first outbreak, as restrictive measures will be limited to particular regions and sectors. We would expect these "smart lockdowns“ to lower the negative demand impact, so as not to repeat the absolute low of 73.7 million bpd in April. The maximum negative demand impact in April 2020 was -26 million bpd, and the peak month in the second wave could come close to this at -18 million bpd, compared to the levels projected prior to the pandemic. We will be revisiting and updating these assumptions as data becomes available.

North America (notably the lower US states), the Middle East and Southeast Asia will be hit relatively harder, Rystad