The future of the oil industry

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Global oil demand may fall by 29m barrels a day this month, three times the OPEC deal’s promised cuts

been said, is the blood coursing through the veins of the world economy. In 2020 the economy is bleeding red. As covid-19 keeps workers at home and planes on the ground, demand for oil has fallen faster and further than at any point in its history. Amplifying the shock, a furious row between Saudi Arabia and Russia set off a price war in early March. Last month oil prices fell by more than half, leaving a giant industry reeling.

In fact private oil firms, state-controlled companies and countries that rely on energy exports should brace themselves for a long period of pain, and use the crisis to begin the restructuring that will have to take place if the planet is to deal with climate change. A last reason for scepticism is that the covid-19 crisis could further dampen long-term oil demand. Hundreds of millions of people are living through an experiment with home-working, fewer flights and less urban pollution. This could help change public opinion about the desirability of a faster shift from an economy built on fossil fuels.

 

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The world oil producers need this fall in production, to stave off the continued uncontrollable fall in prices that's hurting economies.

macariomx And that's exactly why the cut didn't work...

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