According to a report released by Wood Mackenzie on May 12, 2020, demand for crude oil will take until at least 2026 to recover under a full recovery scenario.[1] In its report, Wood Mackenzie examined several trends happening as a result of the pandemic: reduced travel and trade, greater government involvement, and increased automation. The analysts then developed three scenarios for how those trends could affect energy over the next two decades. In the ‘Full recovery’ scenario, there is a rapid return to pre-pandemic conditions. Under the ‘Go it alone’ scenario, economies are slow to recover from the pandemic, with mixed outcomes for coal, oil and natural gas. And finally, in the ‘Greener growth’ scenario, governments focus stimulus programs on supporting the energy transition.

While natural gas use and coal use are expected to trend upward and downward, respectively, across all scenarios, crude oil demand is less predictable. Under the ‘Greener growth’ scenario, for example, oil demand would slowly rebound over the next decade, followed by a sudden decline in 2030 as policies reinforce the energy transition and electric vehicles take hold. In the other scenarios, oil demand slowly increases over the next two decades.

[1] https://www.eenews.net/assets/2020/05/13/document_ew_02.pdf