The International Energy Agency (IEA) has predicted that the global oil demand will decline by as much as 29 million barrels of crude oil per day in April 2020 due to the lockdown caused by the coronavirus pandemic.
In its monthly report, which was released on Wednesday, April 15, 2020, IEA stated that the decline is going to erode the efforts of the Organization of Petroleum Exporting Countries (OPEC) and its allies to contain the glut in crude oil supply globally.
According to the agency, even if the lockdown eases, a decade of demand growth will be wiped out this year when the average daily consumption of oil plunges by as much as 9 million barrels in 2020.
It could be recalled that OPEC and its allies had agreed to about 9.7 million barrels per day output cut over a 2-month period in order to help stabilize the oil market, which has been struggling with low demand, supply glut and an unprecedented crash in prices globally.
Despite these efforts, the global inventory is expected to accumulate by 12 million barrels per day by May this year thereby causing a huge logistics problem in the oil industry. The demand in April is expected plunge by 29 million barrels per day in April when compared to what was achieved a year ago.
However, IEA said that US, China, South Korea and India, have all offered their strategic inventories for the industry to temporarily jeep unwanted barrels of crude.
Although some commentators are suggesting a higher slump, IEA believes that the situation could have been worse but for the deal by OPEC+ and other top oil producing countries.