The Paris-based agency, which monitors energy markets for the world’s most advanced economies, says its base case is for a slump in demand of around 90,000 barrels a day, assuming that the situation in China improves in the second quarter.
“While the situation remains fluid, we expect global oil demand to fall in 2020 — the first full-year decline in more than a decade — because of the deep contraction in China, which accounted for more than 80% of global oil demand growth in 2019, and major disruptions to travel and trade,” the IEA said in its March oil market report.
The IEA said that the “visible decline in transport, industrial and commercial activity” points to a drop in global oil demand of 2.5 million barrels a day for the first quarter, compared to the same quarter last year. Of that, China would account for 1.8 million barrels a day.
“The immediate outlook for the oil market will ultimately depend on how quickly governments move to contain the coronavirus outbreak, how successful their efforts are, and what lingering impact the global health crisis has on economic activity,” the IEA said.