In succor to Nigeria, global watchdog says oil demand yet to peak -

Global oil consumption is not peaking any time soon, the head of the International Energy Agency said Monday providing relief to oil producers like Nigeria sitting on vast oil reserves with their economies struggling due to lower demand arising from the coronavirus pandemic.

“In the absence of strong government policies, sustained economic recovery and low oil prices are likely to take global oil demand back to where it was, and beyond,” Fatih Birol said in an interview with Bloomberg News.

The world consumed last year nearly 100 million barrels a day of oil but the IEA predicts that global oil demand for May will be about 21 million barrels per day (bpd) less than pre-crisis levels.

Birol said that behavioral changes in response to the pandemic are visible but not all of them are negative for oil use.

“People are working from home more, but when they do travel, they are more likely to be in cars than public transport,” he said.

“Video conferencing will not solve our energy and climate challenges, good government policies might,” Birol said.

The Nigerian National Petroleum Corporation had earlier set a target to increase Nigeria’s crude oil reserves from 37billion barrels to 40billion barrels by 2020 but a dearth of investment occasioned by poor fiscal and regulatory frameworks has put paid to this ambition.

To compound the problem, security, and environmental challenges in the Niger Delta, high industrial technical cost, funding of Nigeria’s own investments have also proved to be a problem.

Yet the coronavirus pandemic and the changes it portends including remote work and reduced travel, has led some in the energy industry to conclude that peak oil is upon global oil demand.

But the IEA believes otherwise. Birol compared the current situation with 2008 and financial crises when oil demand fell before consumption gradually picked up again.

He believes something similar would happen again soon and the organisation has said that oil will continue to rise well into the next decade

According to the IEA, global petroleum consumption could possibly reach about 105 million barrels a day by 2030 and about 106 million by 2040 as a lower oil consumption from electric cars will basically be offset by more demand from petrochemicals.

Isaac Anyaogu

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States