Russia sees COVID-19 impact on oil demand to last until 2023-2024

Russia expects the fallout from the COVID-19 pandemic on the global consumption of oil and oil products may last until 2023-2024, a draft government document, seen by Reuters, showed.

It also cites the decarbonization of leading global economies as a potential threat to its oil industry, a key source for Moscow's budget revenue.

World oil and liquid fuels production fell in 2020 to 94.25 million barrels per day (bpd) from 100.61 million bpd in 2019, amid the pandemic, which led to lockdowns, halting 80% of air traffic and a quarter of road traffic at its peak and denting fuel consumption.

The Organization of the Petroleum Exporting Countries expects oil demand to grow by 5.6 million barrels per day this year under its base case scenario. Russian Deputy Energy Minister Alexander Novak has also projected similar growth.

The draft document, outlining oil industry developments until 2035, also showed that Russia could lose global oil market share due to curbs on oil production and exports.

It says global oil prices are likely to trade in the range of $50-$75 per barrel by 2025, while in the second half of 2020s prices are seen at $50-$60 per barrel and they are unlikely to fall significantly below $50.


Russia also sees challenges to its oil industry from the decarbonization of the economics in Europe and North-East Asia, its key exporting markets.

The document, for example, cites declining demand for diesel in Europe as well as rivalry from traditional and new suppliers of energy.

"Many European cities plan to restrict usage of cars with diesel engines, in particular, Paris and Rome plan to ban diesel engines in the zero emission zones as soon as in 2024," it said. (Reporting by Oksana Kobzeva; writing by Vladimir Soldatkin; Editing by Alex Richardson and David Evans)

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