As world leaders discuss how to deal with climate change, global oil demand has quietly rebounded to more than 100m barrels a day before the novel coronavirus outbreak, according to BP.
Despite the increasing urgency of curbing greenhouse gas emissions, fossil fuel consumption levels are recovering. Due to severe restrictions on energy supply, oil prices have rebounded to multi-year highs, threatening the recovery of the world economy and prompting major crude oil consumers to call on OPEC to increase production.
But that is a good thing for BP and its peers, which have reported a big increase in profits.
Murray Auchincloss, BP's chief financial officer, said at a meeting on Tuesday:
"sometime next year we [oil demand] will be higher than before the outbreak. OPEC + has done a good job in balancing supply and demand, so we have been able to maintain constructive oil prices. "
And the airline industry is recovering as the U. S. government reopens its borders. Fernando Valle, a foreign media analyst, expects the airline industry to increase its crude oil consumption by more than 250000 barrels a day as restrictions on vaccinated travelers fall in the United States and Europe.
George Dix, an oil analyst at Energy Aspects, takes a similar view, saying the new rules will boost oil consumption by 200000 barrels a day this quarter. He said:
"because flights between the United States and South America have returned to near pre-outbreak levels, while other regions are still some way from resuming international flights, there is expected to be a significant recovery in flights between Europe and the United States."
Although the aviation industry has not fully recovered from the epidemic, the average daily demand for crude oil has rebounded to more than 100 million barrels. Strong demand reveals how demand for diesel and petrochemicals has boosted oil consumption over the past two years.
The last time consumption reached such a high level, the US was fully exploiting shale oil and OPEC and its allies maintained only modest capacity reserves.
Now the situation is very different. Us oil production is 1.7 million barrels a day lower than it was before the outbreak, as shale companies focus on improving investor returns rather than corporate growth. OPEC + is restoring supplies that were idle during the outbreak, but the recovery is too slow for major energy consumers.
The current shortage of oil supplies is about 2.5 million barrels a day, according to Goldman Sachs.
Damien Courvalin, an oil analyst at Goldman Sachs, said seasonal winter demand and the recovery of the international aviation industry mean oil demand will hit an all-time high early next year.