The impact of the novel coronavirus (COVID-19) outbreak is estimated to reduce energy demand by around 2.5% in 2025 and 3% in 2050, according to BP's Energy Outlook report released Monday.
According to BP's Rapid scenario in the report, the impact of the pandemic will be more pronounced for oil demand, which is estimated to be around 3 million barrels per day (mb/d) lower in 2025 and 2 mb/d in 2050.
"The majority of this reduction reflects the weaker economic environment, with around 1 mb/d of the reduction in 2025 a result of the various behavioural changes," the report said.
Of BP's two other scenarios, the Business-as-usual (BAU) and Net Zero scenario, the report showed that marginal impacts are similar.
According to the report, the COVID-19 outbreak could lead to a number of behavioural changes, including less travel and/or an increase in working from home. The report said that many of these behavioural changes are likely to recede over time as the pandemic is brought under control, restoring public trust. However, some changes may remain, including increased working from home.
Nonetheless, all scenarios see oil demand fall over the next 30 years: 10% lower by 2050 in BAU, around 55% lower in Rapid, and 80% lower in Net Zero.
- Lower oil demand if economic losses from COVID-19 are bigger
BP estimates that economic activity will recover partially from the impact of the pandemic over the next few years as restrictions are eased.
"The level of global GDP is assumed to be around 2.5% lower in 2025 and 3.5% in 2050 as a result of the crisis. These economic impacts disproportionately affect emerging economies, such as India, Brazil and Africa, whose economic structures are most exposed to the economic ramifications of COVID-19," BP said.
However, economic losses from COVID-19 may even be significantly bigger especially if there are further waves of infection, BP estimated in its "greater impact case", an alternative case in its Rapid scenario, which focuses on greater impact from COVID-19.
According to this case, the level of global GDP will be reduced by 4% in 2025 and almost 10% by 2050 due to the pandemic, bringing the global energy demand to a level even 8% lower in its Rapid scenario, with the level of oil demand around 5 mb/d lower.
By Sibel Morrow and Firdevs Yuksel