Global oil demand could dive by 20% as 3 billion people are in a lockdown because of the coronavirus outbreak, the head of the International Energy Agency (IEA) said on Thursday as he called on OPEC leader Saudi Arabia to help stabilise oil markets.
"Today, 3 billion people in the world are locked down. As a result of that we may well see sometime throughout this year demand to fall down, as some say, about 20 million barrels per day," Fatih Birol told an Atlantic Council conference call.
The world's oil demand stood at 100 million barrels per day (bpd) in 2019.
Birol said that, despite huge demand destruction, oil supply was nevertheless set to rise by another 3 million bpd as part of Saudi Arabia's market share battle with Russia.
"Being the president of the G20 this year, one would expect that Saudi Arabia will provide a constructive support to the stabilisation of the global oil markets based on their past record," he said.
He did not say whether Saudi Arabia, Russia and the United States could play a stabilising role together with the IEA.
"I'm talking to a lot of people," he said.
Birol said the IEA, which coordinates energy policies of industrialised nations, would give a clearer outlook and timeframe on the global oil demand in two weeks, when the agency is due to publish its monthly report.
But given the major oversupply, the world might soon run out of global storage capacity. Birol added that demand recovery would neither be easy nor quick.
Birol also said he expected U.S. oil production to decline significantly but then surprise the market on the upside when it recovers together with higher oil prices.
(Reporting by Shadia Nasralla and Dmitry Zhdannikov; Editing by Jane Merriman and Alex Richardson)
