A continuation in the fall of oil demand will be more dependent on the lifting of lockdowns due to COVID-19 than economic activity, Fatih Birol, the International Energy Agency (IEA) executive director, said on Thursday.
Speaking at a media webinar to present the main findings of the IEA's Global Energy Review 2020 report, Birol said the inclusion of more than 100 days of data for the report showcases the big shock the global energy system is facing due to the pandemic.
"This is nothing less than a major shock to the global energy system and the implications of this shock will be felt throughout the energy industry for many years to come," he stressed.
According to Birol, a continuation of falling oil demand will be more dependent on the lifting of lockdowns than economic activity "because about two-thirds of the oil consumption comes from the transportation sector. Therefore, it will be a gradual and slow recovery of demand."
"We expect demand decline will continue throughout this year," he added.
On falling emissions, Birol classified it as a historic decline but not a historic success, citing what happened following the 2008 financial crisis in which emissions rebounded to the highest in history in 2009/2010.
"The important thing is not to see a major rebound. In the year 2009 after the financial crisis, the global emissions declined by 0.4 gigatons. But in the year 2010, they rebounded and increased by 1.7 gigatons, four times higher than the previous year," he said.
To ward off this possibility, the IEA was the first in the world to call on governments to put clean energy technologies at the heart of the recovery packages, Birol said.
He asserted that recovery packages are very important regardless of whether a rebound similar to the one in 2010 will occur or whether a sustainable emission path will be laid.
"The issue is to convince these governments to put clean energy policies in the stimulus packages that will also help job creation, improve the economy and boost the resilience of energy infrastructure. So we discussed this with energy ministers, but we also know that we have to convince finance ministers," Birol explained.
Over the next weeks and months to come, the IEA’s visible input will be seen in many well-designed stimulus packages, and it is currently working with many governments, especially on investments, according to Birol.
"We are in fact, on 27th of May, publishing our World Energy Investment, which looks at how energy investments are affected by the current crisis and the near-term outlook," Birol declared.
"I hope global energy demand rebounds strongly because energy means life, economic growth, comfort and access to better lives," he said.
In acknowledging that energy is good and emissions are bad, he said the recovery from the current crisis should be sustainable bringing with it a more modern, resilient and cleaner energy infrastructure than today.
By Ebru Sengul Cevrioglu