Interview Synopsis

Global Oil Market – Cyclical & Secular Challenges

  • Multi Asset
  • Energy
  • Global

COVID-19 sent the global oil market into disarray, but there are more elements to consider when looking at the sector’s recovery – from China’s growth plans to fuel efficiency regulation. We spoke to a former head from the International Energy Association (IEA) to get the full picture on the challenges facing this sector and what its future will hold.

Exploring the oil market’s prospects for this year and beyond

The specialist first gave their observations on the recovery pace, which picked up in mid-2020 as restrictions eased, but was felt unevenly across different sectors. While “demand for transport fuels, gasoline and diesel was gradually improving, and petrochemicals remained relatively strong, there was absolutely no reaction to speak of from the aviation sector”.

Regarding the outlook from the IEA, the Energy Information Administration and OPEC on future oil demand, and whether this consensus holds any weight, they countered that “you have to give all forecasters and all analysts of the oil market right now a hell of a lot of scope, because we’re dealing with something here which is unprecedented.” They are also sceptical about vaccines providing the boost previously envisioned by many commentators: “I don’t think that we have adequately factored in the problems of getting a critical mass of economically active people vaccinated.”

China is one of the world’s most important markets for oil, and energy will play a big part in its plans to double its economy by 2035. Petrochemicals are touted as particularly important.  “Consumer demand means plastics and plastics demand growth in China is going to be an enormous driver over the next 20 years or so.” 

Other discussion points included when oil demand could reach 2019 levels, if and when prices will recover, and how critical policy changes over the coming years could impact the industry.

To access all the human insights from Third Bridge Forum’s Global Oil Market – Cyclical & Secular Challenges Interview, click here to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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