The Global Energy Agenda

by Randolph Bell, Jennifer T. Gordon, Paul Kielstra, and Andrew Marshall (Editors)

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The Global Energy Agenda can also be read as a PDF. Download the full paper using the button below.

The 2021 Energy Agenda: The Atlantic Council surveyed hundreds of leaders in the energy field, and this report summarizes their responses. The energy agenda for 2021 should be to realize the opportunities created by COVID-19 to build a more sustainable energy system. The energy transition is not inevitable, and the private sector can only do so much; governments, therefore, have a critical role to play in ensuring a sustainable future.

Key Points

• A majority of respondents believe COVID-19 has accelerated the energy transition and peak oil demand is coming soon.

•There are three clusters of energy experts, each with an internally consistent view of the world and best identified by their projections about the timing of peak oil demand.

• Political will is seen as the biggest impediment to climate action.

•Energy and environmental justice is regarded as crucial and survey respondents and essay authors were adamant that the energy transition must bring benefits globally, to all countries and at all socioeconomic levels.

As we begin 2021, the COVID-19 crisis that began a year ago still hangs over the world with its public health and economic consequences. That said, with the spread of vaccines and treatments, we see the light at the end of the tunnel. For the energy world, we are even more hopeful.

For many governments, clean energy investments have been a significant part of their economic stimulus plans in the past year. We are also hearing from an increasing number of government officials, not least of which from the incoming Biden administration, that 2021 could be the year that global leaders get more serious about addressing climate change.

It is in this context that the Atlantic Council releases the inaugural edition of The Global Energy Agenda, a publication intended to set the stage of the energy debate for the year ahead. Its publication coincides with the fifth annual Atlantic Council Global Energy Forum. Normally convened in Abu Dhabi, one of the world’s great energy capitals, this year’s forum is entirely virtual. As such, we intend to build upon the Forum’s established reputation for convening the best minds and leading players influencing the energy world – at a time when this conversation is most needed.

The Global Energy Agenda’s launch edition includes a revealing survey of energy leaders from governments, industry, think tanks, and academia and a rich series of essays from a remarkable group of authors that provide context and understanding of the energy implications of the political, economic, and social upheavals of the year that has passed.

The survey’s primary take-away is that energy leaders, by and large, believe that COVID-19 has accelerated the energy transition. This is remarkable given that one might have suspected the economic slowdown would impede progress on clean energy. You can see this data below. However, many of our essay authors caution that nothing is inevitable and that it is up to policy makers and other leaders to seize the opportunity to rebuild economies in a cleaner way.

The essays in the publication that follows capture the Zeitgeist of this moment, balanced between the hope that grows from innovation and the human spirit, and the dangers that remain in our sometimes vulnerable and often politically divided societies. The events of January 6 in Washington were an unsettling reminder of the challenges facing even the most advanced societies.

It is a moment of hope as countries worldwide make serious climate commitments and together combat COVID 19, but it is also a moment of political uncertainty in many parts of the world, colored by a leadership transition in the United States and increased US-Chinese tensions. At the same time, the Abraham Accords underscore how long-time rivals can become partners through far-sighted diplomacy.

This publication has several underlying themes, but central to them is a conviction that the energy transition will be difficult, but that the political and industry will to take it on is considerable and growing.

In Chapter One, you can read about the role of oil and gas as the industry moves to reduce its emissions footprint; in Chapter Two, you’ll learn how the geopolitical map of energy producers and consumers has been shifting as the emphasis on decarbonizing the global energy system grows and countries compete to be leaders addressing climate change. Chapter Three builds on these ideas to examine the role of public policy in meeting the climate challenge on a global scale. One key question emerges in Chapter Four: will technology and the human imagination be up to tackling climate challenges in a timely manner. The final chapter argues that it will require a global movement, one that brings clean and reliable energy to all the world’s citizens, to produce justice in the energy transition.

The Atlantic Council’s mission is that of “shaping the global future together” with partners and allies. What the essays that follow underscore is how crucial that collaborative ambition is to a successful energy transition toward cleaner and more sustainable energy sources.

If we have learned anything from COVID-19, it is that an issue in one part of the world can influence all parts of the world. We have also learned that it is better to be proactive in anticipating challenges and then finding their answers, whether it has to do with pathogens or global warming.

We hope we can contribute our part to a better world through the work of our Atlantic Council Global Energy Forum, alongside our partners and participants, and through this publication and the debate we hope it spawns. We are stronger together.

INTRODUCTION

2020 was a year unlike any other in our lifetimes. The dramatic impacts that COVID-19 had on the global energy system—including oil prices in the United States going negative for the first time—were a side note, however, compared to the larger stories of suffering and death, economic upheaval, and the singular scientific achievement of developing multiple highly effective vaccines in under a year. Nonetheless, it is quite possible that the energy system will emerge from the COVID-19 crisis indelibly altered, changes that could be seen by future generations as some of the most consequential impacts of the pandemic.

Spurred by the need to rebuild their economies in the face of COVID-19, many global leaders saw an opportunity to address climate change through “green stimulus” plans and net-zero pledges. With the pandemic raging and unemployment at near-record highs, one could have easily imagined that climate change would have yet again been put on the backburner, a long-term problem that could be addressed only after the crisis at hand was resolved. But in a year of record wildfires, hurricanes, and extreme heat, many leaders saw an opportunity to address both the economic and climate crises together.

While all is not lost if leaders ultimately fail to implement comprehensive climate plans this year, it is hard to imagine a stronger global alignment of political will to act on climate change—and, crucially, to spend on climate action—than we have right now. 2021 will be the year we see if leaders start to make good on their promises and if the global community can meaningfully address climate change or not.

For energy leaders, then, the agenda for 2021 should be to realize the opportunities created by COVID-19 to build a more sustainable energy system.

The Global Energy Agenda

A renewed commitment to the fight against climate change of course will not be the only energy story in 2021. Oil and gas still play a crucial role in the global economy and the industry is at an inflection point, unclear about the future of demand and what level of investment is necessary to meet that demand. Geopolitical and energy security concerns drive the energy decision making of most countries, and—as the pandemic continues to reshape the geopolitical order—2021 could be even more volatile than the past few years. Finally, energy leaders are waking up to the deep injustices of the energy system, which includes the sometimes conflicting needs of providing energy to the millions of people worldwide who suffer from energy poverty while also minimizing the environmental impact of the energy system on the most vulnerable populations.

The 2021 Global Energy Agenda Survey

To better understand the key issues facing the energy system in 2021, the Atlantic Council Global Energy Center surveyed a global group of energy leaders, asking them a dozen questions in five issue areas:

Oil and gas;

Energy geopolitics and energy security;

The energy transition, decarbonization, and climate change;

New energy technologies and innovation; and

Energy and environmental justice.

We conducted the survey between October 28 and November 23, 2020, a period that both spanned the US presidential election and the announcement of hopeful results from several major phase III trials of vaccines against COVID-19. See Appendix A for more demographic information about survey respondents.

The survey results will be explored in more detail in their respective chapters below. But a few key takeaways help provide overall context for this volume.

COVID-19 has accelerated the energy transition and peak oil demand is coming soon: 61 percent of those surveyed said that the pandemic will accelerate the energy transition while just 20 percent believe it will impede it. Similarly, nearly nine in 10 survey respondents believe that oil demand has already peaked or will do so within 20 years.

Three clusters of energy experts: The data reveal three poles of opinion among energy experts, and these clusters are best identified by their projections about the timing of peak oil demand. Forty-three percent of respondents believe that peak oil demand has already occurred or that it will occur within the next five years; 46 percent forecast that it will occur late this decade or sometime in the next one; finally, 11 percent think it will occur in 2040 at the earliest or that it may not ever take place.

These groupings reveal more than divergent thoughts on one issue. At various times, respondents’ thinking on peak oil demand correlates strongly with what they think in other areas, indicating three internally consistent views of the world.

We have labelled those who think peak demand has occurred or will do so in the next five years as “the transition bulls,” those seeing it delayed until after 2040 as “the transition bears;” and those in between as “the moderates,” to reflect their thinking on the speed of decarbonization in the industry. Most of our comments will be about the first two groups, as the moderates tend to hew closely to the average results.

Pandemic impacts receding: When we first launched the survey, early respondents believed that COVID-19 would continue to be a substantial driver of change in the energy system; however, the pandemic’s profile receded with the arrival of vaccines. Before the announcement of successful vaccine trials in early November 2020, respondents identified COVID-19 as the leading risk, by far, in energy geopolitics in the coming year. However, after the vaccine announcements, the number citing COVID-19 as a risk—as well as saying that its impact on the energy transition would be substantial—declined noticeably. Although in the latter period pandemic-related risk remained the most frequently cited problem, those choosing it dropped from 41 percent to 35 percent.

Political will the biggest impediment to climate action: Our respondents claim that emissions reduction is both feasible and worthwhile, but many in the industry are unsure that political leaders can deliver. Roughly three-quarters of those surveyed believe that the goal of net-zero emissions by 2050 is possible to achieve without damage to the economy, but only 36 percent are very or somewhat certain that it will take place. The main reason that they see for this disconnect is policy and political will.

Similarly, 94 percent say that a consensus at COP26 next year on carbon trading rules is important to prevent a rise in average temperature of over 2 degrees Celsius, but only 11 percent believe that this consensus will occur at the Glasgow meeting. Forty percent think it will be at least another five years before the countries in question can reach a consensus. More worrying still, 19 percent of government respondents say it will never happen.

Parochial vision: At times, the survey results suggested answers were most determined by the field in which the respondent works. This trend was the clearest when we asked respondents how to best ensure that low-income and marginalized communities would benefit equally from the global energy transition. With a striking commonality, respondents claimed that the best way to help those in need is to support the field in which the respondent works.

While not entirely surprising, it does suggest that energy leaders who seek to understand the perspectives of all sides of the industry are best positioned to make objective decisions. In a time of dramatic change, that could be an invaluable asset.

The 2021 Global Energy Agenda essays

To complement the survey and provide a deeper, qualitative exploration of the key energy questions for 2021, the Atlantic Council Global Energy Center also commissioned a series of essays from global experts, corporate leaders, and government ministers.1 Essay contributors hail from five continents and include the head of the Organization of Petroleum Exporting Countries (OPEC), the head of the International Renewable Energy Agency (IRENA), the High Level Climate Champion for COP25, and the former director of the Chinese government’s Energy Research Institute.

These essays are not intended to provide a uniform outlook for the year ahead in energy. Instead, through their diversity, they aim to set the terms of debate and outline what possible outcomes might look like, depending on the decisions that governments and industry collectively make.

Taken together, we hope The Global Energy Agenda survey responses, analysis, and essays will lay out the contours of the current energy system, assess the events and trends that will shape the energy system in 2021, inform fact-based debate and analysis about the best path forward, and set the shared energy agenda for the year. An oil rig enters Cape Town harbor. (Source: Unsplash / Clyde Thomas @clydeo)

CHAPTER I: OIL AND GAS

The oil and gas industry was battered in 2020, with COVID-19 lockdowns constraining transportation and dramatically reducing nearly all forms of liquid fuel demand. Global oil demand dropped from about 101 million barrels per day (mbd) in December 2019 to 85 mbd at its low in the second quarter of 2020, and oil prices in the United States even temporarily went negative as storage capacity filled up. As a result of the demand crash, oil majors across the United States and Europe collectively wrote down more than $145 billion in assets—about 10 percent of their total value. An oil price war between Saudi Arabia and Russia in March and April further shook market confidence, and tension among OPEC members later in the year revealed further weaknesses in the current OPEC/OPEC+ -centric oil governance system.

Short-term Predictions

With the oil market showing early signs of recovery during the survey period—demand had returned to about 95 mbd—we asked survey participants two related questions about the oil market in 2021: will oil demand return to its December 2019 levels by December 2021, and what will the Brent crude oil price be on December 31, 2021?

Seventy-five percent believe that, by December 2021, worldwide consumption will remain below the 101 mbd figure of December 2019.

The Global Energy Agenda

The large majority of survey respondents do not expect the pace of the revival in demand to continue. Seventy-five percent believe that, by December 2021, worldwide consumption will remain below the 101 mbd figure of December 2019. On the other hand, there is a nearly universal expectation of some rise in the Brent benchmark price for oil, with 84 percent projecting a higher figure than the $42.93 (the figure on October 16, 2020, when the survey was finalized), which will require either some further growth in consumption or cutback in production.

While most respondents in all of the major sectors covered in the survey believed that demand would not return to 2019 levels by the end of next year, the size of the minority expecting such growth differs by sector. Those involved in upstream and midstream oil, for example, are noticeably more likely than average to forecast such a revival (33 percent).

Indeed, these expectations are more widespread across energy industry respondents, including those collectively involved in electrical transmission, distribution, and nuclear power (33 percent) liquid natural gas (31 percent), and even renewables (29 percent). Such views are far less common among interested parties observing the industry, notably academics and researchers (20 percent), and those working in government (17 percent).

Forecasts of oil demand in the coming year in part reflect expectations about levels of economic activity. This is also the first instance in this survey in which differing viewpoints on peak oil indicate likely viewpoints on other questions. Of the group that projected a near-term peak oil scenario (the transition bulls), 24 percent believed that oil demand would return to 2019 levels in 2021; 23 percent of the moderates expected a return to 2019 levels; and 38 percent of respondents forecasting that a peak oil scenario would take decades, if it were ever to occur, (the transition bears) anticipated a return to 2019 oil demand in the year ahead.

Respondents’ average estimate for the likely price of Brent crude at the end of next year is $55.78, which is roughly the same as of the date of publication, though significantly higher than the average of slightly over $40 during the survey period. (In comparison, on December 31, 2019, Brent was $67.77 per barrel. In late April 2020, COVID-related economic disruption drove it below $20, but it had recovered to just above $40 by June.)

Respondents’ average estimate for the likely price of Brent crude at the end of this year is $55.78.

The Global Energy Agenda

This average price reflects a substantial level of agreement among those surveyed, with 58 percent giving a figure somewhere between $45 and $55 inclusive, and 80 percent a figure between $40 and $60 inclusive. The average result was also highly similar across differences in age, geography, and sector. The most extreme difference—between the transition bulls and bears—is also relatively muted. The former predict a price of $49.63 by December 2021 and the latter predict $53.33. Even those who foresee a return to demand levels of December 2019 or better still set an average price of just $57.03, over $10 per barrel lower than the price at that time. This is consistent if they believe that rising demand will drive producers to raise output faster than the market recovery can absorb.

Partner Perspective: OPEC+: Back from the brink

By Helima Croft

When we assembled in Abu Dhabi in January for the Global Energy Forum, geopolitics seemed set to exert upside pressure on oil prices. Coming just days after the Iranians fired missiles at Iraqi bases housing US troops in response to the US killing of IRGC Quds Force leader Qasem Soleimani, GEF participants discussed the risk of additional attacks on critical gulf energy infrastructure.

For a brief period it looked as if OPEC might be called on to put more barrels on the market in the event there was a repeat of the type of attack we saw on September 14, when Saudi Arabia’s Abqaiq facility was struck by drones and cruise missiles and half of the country’s oil output was temporarily taken offline. And yet all of these early assumptions about the oil market in 2020 were scrambled as a result of the viral outbreak in Wuhan, China.

The entire Declaration of Cooperation arrangement was put to the test as the OPEC+ producers struggled to form a collective response to the emerging global health crisis. Saudi Arabia pushed for early action at the end of January, fearing a demand contraction similar to what was witnessed in the 2008-2009 financial crisis. Russia, on the other hand, was reluctant to sideline more barrels, having just agreed to a deeper reduction at the December meeting. Russian officials publicly called for more time to assess the actual demand impact of the virus. However, behind closed doors some powerful energy executives were reportedly growing weary of providing an economic lifeline to US shale producers and thereby enabling American energy dominance and Washington’s coercive sanctions regime.

Everything came to a halt that first week in March in Vienna and when Russia balked at the OPEC proposal to cut an additional 1.5 mb/d of supply, the stage was set for a ruinous price war between the sovereign producers. Global storage quickly reached tank tops as producers opened the taps amidst the worst demand collapse in history as governments around the world mandated shelter in place restrictions.

Faced with the potential collapse of the US shale industry, President Trump did a 180-degree turn on OPEC, going from being a fierce critic of the producer group to playing the de facto marriage counselor role to forge a reconciliation and help get the largest collective production cut across the finish line in April.

The Global Energy Agenda

That 9.7 mb/d OPEC+ reduction provided crucial support to the market, and alongside the sharp recovery in Chinese demand, laid the foundation for the current return to $50/bbl prices, an achievement which seemed almost unimaginable in late April when WTI briefly plunged to -$37.63/bbl. And yet the question is whether OPEC+ cohesion will hold in 2021 with vaccine optimism abounding, and along with it the hope of a swift return to pre-crisis mobility patterns?

Unity seems easier to achieve in a lower price environment, when all the producers are essentially in a foxhole together.

The Global Energy Agenda

We have already seen the reemergence of some fissures at the most recent OPEC meetings. Russia has pushed for increased output, pointing to the strength of Asian demand and vaccine progress. It has also expressed concern about losing market share, with Russian Deputy Prime Minister Alexander Novak insisting in December that other producers would put more barrels on the market if OPEC+ did not fill the void. Novak’s remarks were widely seen as aimed at shale producers and we believe that Russia may seek a more constrained oil price environment to keep US production on the sidelines.

Several other producers have recently showed signs of lockdown fatigue as they struggle under the financial weight of their quota obligations or are reluctant to idle their expanded output capacity indefinitely.

Saudi Arabia, on the other hand, has emphatically argued that the producer group must remain ever vigilant in the face of the slow vaccine rollout and cascading government lockdown restrictions. At the January meeting, the Kingdom announced a surprise 1 mb/d unilateral production cut, which we view as an important shot in the arm for the market given the fragility of the near-term demand outlook. Saudi Arabia appears firmly back in the OPEC driver’s seat, but we will continue to monitor Moscow’s moves as its priorities may diverge from a number of the key sovereign producers in the year ahead.

Helima Croft is the Managing Director and Global Head of Commodity Strategy at RBC Capital Markets. RBC Capital Markets is a sponsor of the Atlantic Council Global Energy Forum.

An Austrian army member stands next to the logo of the Organization of the Petroleoum Exporting Countries (OPEC) in front of OPEC’s headquarters in Vienna, Austria April 9, 2020. (Source: REUTERS/Leonhard Foeger)

Long-term Assessments

With long-term demand for hydrocarbons an open question, especially given increasingly ambitious national and private sector climate commitments, we asked respondents two questions about the future of oil and gas.

As discussed earlier, a respondent’s answer to the question “When will oil demand (global annual average) peak?” was singularly predictive of their overall view of the energy system. A closer look, however, suggests that demographic attributes do not predetermine the views of our surveyed experts on peak oil demand.

In terms of geography:

The transition bulls are slightly more likely than the bears to come from the United States (46 percent to 41 percent) with 54 percent of moderates from that country.

Twenty-two percent of bulls, 21 percent of bears and 17 percent of moderates are from Europe.

The equivalent figures for the Middle East and North Africa (MENA) are 22 percent, 29 percent and 17 percent. Despite some variation, these figures are not very far away from the shares reported above of overall respondents coming from these same regions.

Certain employment sector differences also exist between the two groups, but again, they are less pronounced than might be expected. Perhaps predictably, a much greater share of bears than bulls associate themselves with oil and gas (53 percent to 22 percent). That said, important similarities in this area are surprising: roughly the same percentage of each of these ideologically very different groups, for example, are associated with renewables (27 percent of bulls and 21 percent of bears).

Nearly nine in ten survey respondents believe that oil demand will peak within twenty years.

The Global Energy Agenda

All of this aside, a key figure emerges from the data: nearly nine in ten survey respondents believe that oil demand will peak within twenty years. A more precise year during which that milestone will occur, however, is a matter of some disagreement. As the chart below shows, between 20 percent and 25 percent believe each of: that the tipping point has already passed, that it will do so within five years, that it will occur in the second half of this decade, or that it will happen in the 2030s. The overall average of these individual expectations is that peak oil demand will take place in10.5 years, or soon after the start of the next decade.

Among respondents, certain characteristics are consistent with different expectations about peak oil’s arrival. Not surprisingly, those involved with renewables expect the future to come a little sooner than do most. Those in this field—after taking out those who are not also involved in oil and gas—forecast, on average, that the date will arrive in 7.2 years. Those in government expect developments to move a bit slower, giving an average figure of 9.0 years. Those in the oil and gas industry, on the other hand, think that they have more time. Respondents from this sector who are not also involved in renewables expect the high point in demand to occur 14.5 years from now. Even they, though, see the writing on the wall, with 82 percent predicting peak oil demand within the next two decades.

While one’s field of work affects views in this area, so too does one’s generation. Respondents aged below thirty-five years expect peak oil to happen, on average, in just six years and nearly half (46 percent) believe that bridge has already been crossed. Respondents who are between thirty-five and fifty-four years old foresee the peak to occur in 8.4 years on average, and those fifty-five or over in 12.9 years, more than twice the time forecast by the youngest respondents.

While we do not have survey data from before COVID to back up this claim, we suspect the number of people who believe oil demand has already peaked is far higher now than before the pandemic, and that the average predicted timeline for a peak in oil demand was far sooner in 2020 than it would have been in 2019. Numerous articles were published in 2020 like one from Bloomberg called “Peak Oil is Suddenly Upon Us,” which surely reflected and impacted the zeitgeist.

But as International Energy Agency (IEA) Executive Director Fatih Birol argues in his essay below, “Overall, there is no indication that the pandemic has come close to triggering a major structural shift in the oil intensity of the global economy. If the world economy recovers without significant changes in government policies to accelerate the adoption of low-carbon alternatives, oil demand will recover with it.” The role of government policy, Birol argues, will be crucial in order to seize the opportunity presented by COVID and accelerate the energy transition.

Despite the pandemic, oil’s dominance isn’t over: What happens next hinges on governments

By Fatih Birol

For more than half a century, oil has been the global economy’s primary energy source. It has shaped geopolitics, investment flows and energy security strategies. After the oil shocks of the 1970s, oil was largely phased out from electricity generation and the heating of buildings, but it remains dominant in the transportation sector. Today, it is the fuel that enables mobility among the growing ranks of the middle class in emerging economies, and it moves goods along global supply chains. In the second half of the past decade, the share of oil in the global energy mix actually increased as lower oil prices contributed to a growing preference among consumers for larger vehicles like SUVs.

Given oil’s unique role in the transportation sector, it is not surprising that the travel restrictions implemented in response to the COVID-19 pandemic have hit global oil demand hard. It is expected to decline by 8 percent in 2020, a shock unprecedented since World War II. The pandemic also unleashed social changes: people are now working from home and using online cooperation tools to a much greater extent. In addition, concerns and political commitments to address climate change intensified this year. The European Union, China, Japan, New Zealand, the Republic of Korea, and other economies—together representing a substantial proportion of global oil demand—made new, more ambitious climate pledges targeting net-zero emissions by the middle of this century, or soon thereafter in the case of China. Unsurprisingly, this has spurred further debate on the future of oil, which was one of the key focus areas of the International Energy Agency’s (IEA) recently published World Energy Outlook 2020.

This new IEA analysis took a granular, data-driven look at some of the changes brought about by the coronavirus and their impact on energy demand. It turns out that these changes affect demand in both directions. Video conferences can clearly replace some business travel, and more extensive working from home leads to less commuting. However, there are also clear indications that people are reluctant to use public transportation during the pandemic. For example, if a person who used to take the train to work every day switches to a routine of going to the office only one day a week—but by car—it would result in a net increase in oil demand.

Moreover, depending on the logistics involved, the shift from buying goods from local stores to ordering them online for delivery can also increase oil demand. While the overall aviation industry struggled during the pandemic, e-business supported robust air cargo activity. The epidemic also led to a surge of demand for petrochemical products like packaging, masks, and sanitizers. Overall, there is no indication that the pandemic has come close to triggering a major structural shift in the oil intensity of the global economy.

If the world economy recovers without significant changes in government policies to accelerate the adoption of low-carbon alternatives, oil demand will recover with it.

There is still a considerable degree of uncertainty over how the pandemic and the subsequent economic recovery will play out. In the World Energy Outlook, the Stated Policies Scenario—which reflects current announced policy intentions and targets of governments—is based on the assumption that the global economy will recover in 2021 and then return to the pre-pandemic growth path in the following years. This is consistent with the International Monetary Fund’s latest economic outlook. That macroeconomic environment would lead to global oil demand reaching its 2019 level again in 2023. However, even if the projected recovery were to take place, the era of dynamic oil demand growth is likely over.

Energy efficiency policies and the increasing electrification of transportation are weighing on oil demand growth, adding to the impact of the ongoing phase-out of oil from the heating of buildings and the electricity sector. Still, a global economic recovery would offset that trend by driving growth in areas like shipping, aviation, trucking, and petrochemicals.

The comprehensive policy measures that would put global oil demand into sustained decline while still supporting robust economic growth are incorporated into the World Energy Outlook’s Sustainable Development Scenario, which provides a roadmap for achieving international energy and climate goals.

A structural decline in global oil demand would result from clear policy action by governments rather than spontaneous economic and social changes, even in the wake of a pandemic as serious as today’s global health crisis.

In the Sustainable Development Scenario, global oil demand never recovers to its 2019 level. Instead, by the end of the coming decade, it falls to 87 million barrels a day, a level comparable to that of May 2020 when large parts of the world economy were under a lockdown. No single policy or technology is able to achieve this outcome; a comprehensive set of measures would need to be applied globally.