"Predicting the oil market is very challenging. Covid-19 has created major disruption to demand and we expect to see the continuation of that disruption in 2021. But if you project the horizon to 2030, we will go back to an acceptable level of growth, potentially peaking in 2030," he said.
Al Kaabi added that the pandemic has caused oil demand to drop by 30 per cent in March and April, from a peak of 100 million barrels per day at the end of 2019. However, demand has started to recover, he added, reaching levels seen in the 1990s and will rise further over the coming 12 months.
Al Kaabi sees fewer people travelling in post Covid-19 and lower activity in a number of sectors. But he sees oil demand recovering to 2019 level in certain sectors like jet fuel but other sectors will take longer to recover than others.
He added that climate change and government policies are impacting the investment decisions by big international oil companies, which could result in episodes of disruption of supply. But he added, this would create space for national and privately owned oil companies to invest in the upstream sector.
Oil prices suffered a fresh bout of weakness this month amid growing concerns over rising global coronavirus cases, resulting in slower economic recoveries of the Gulf economies.
At the recent Opec ministerial meeting, the group emphasised that it stands ready to act if the outlook for oil demand continues to worsen, suggesting that it is increasingly worried.
Capital Economics said continued low oil prices are unlikely to result in dollar pegs being abandoned, but governments will need to address large budget deficits.
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