Russian Energy Minister Alexander Novak said on the air of the Russia 24 TV channel that the current oil consumption is 7% lower than the pre-crisis level, but there are prerequisites for a slowdown in demand recovery.
According to the minister, currently the supply of oil on the market is less than the demand.
“Today the quotes that we see fully correspond to the market situation. Considering that demand has not yet fully recovered. Today, oil consumption in the world is about 93 million bpd, which is 7% lower than before the crisis. As you know, the deepest drop was in March-April, reaching a 25% reduction, that is, the market recovered by about 18% in terms of demand. This is encouraging, “he said.
“But nevertheless, we see that now recently there are prerequisites for a certain slowdown in the recovery of demand. This is somewhat alarming, you need to keep your finger on the pulse in order to watch. How it will recover in order to prevent a surplus in the market. time supply is less than demand by about 1.5-2 million barrels, which makes it possible to gradually reduce the balance. This maintains the balance in the market, this maintains the overall positive situation, “the minister continued.
He noted that oil demand could recover in full in the 2nd quarter of 2021, and the assessment of demand recovery has worsened.
“Demand is gradually recovering as restrictive measures are lifted and activity increases, as well as the movement of air transport, automobiles, we see that these figures are growing gradually. Although they naturally have not yet reached pre-crisis, we believe that demand may be by the middle of next year, in the 2nd quarter of next year it will be restored in full, “the minister said.
“Initially, the estimates were more optimistic, around the first quarter of 2021. Today we discussed at the ministerial monitoring committee – most ministers, experts, analysts say that this is the second quarter. Therefore, we will look, but again there are many uncertainties. Much will depend on that. how the world's population will be vaccinated and the population immunized in order to prevent the spread of coronavirus and restrictive measures. And it depends on this, “Novak explained.
The minister stressed that the task is to restore production as demand recovers, so as not to overheat the market. “Our task today is to ensure a balanced market and, of course, gradually, as demand recovers, to restore production so as not to overheat the market, and on the other hand, to restore production, because in many countries, such as Russia and other countries – oil exporters, these are budget-forming industries, which, of course, are waiting for a further recovery in demand, an early recovery of the market, “he concluded.