Jun 19, 2020 - Energy & Climate

Coronavirus pandemic means more oil will stay in the ground

Ben Geman

Oil and gas workers work on a rig in Colorado — Photo: RJ Sangosti/The Denver Post via Getty Images

The pandemic will "expedite peak oil demand," the consultancy Rystad Energy said in a note this week, taking stock of how much additional oil will not be produced in the future as a result.

Why it matters: Rystad's summary of its annual review of oil resources shows how the coronavirus pandemic is prompting analysts to change their thinking about the future of oil.

The big picture: The consultancy told Axios they see oil demand bouncing back to exceed pre-pandemic levels, but now projects demand peaking at roughly 106.5 million–107 million bpd in 2027–2028, as opposed to 107.5 million bpd in 2030 under a prior forecast.

What's next: The accelerated peak will curtail some oil exploration efforts, Rystad said.

“Non-OPEC countries account for the lion’s share of 'lost' recoverable resources with more than 260 billion barrels of undiscovered oil now more likely to be left untouched, especially in remote exploratory areas,” Per Magnus Nysveen, Rystad's head of analysis, said in a statement.

Go deeper: Coronavirus drives crude oil owners to hunt around for alternative storage

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Coronavirus pandemic means more oil will stay in the ground

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