Commodities

Worst of oil demand destruction is over: Saudi Arabia

Our Bureau New Delhi | Updated on October 26, 2020 Published on October 26, 2020

Saudi Arabia’s Energy Minister Abdulaziz bin Salman said that the worst for oil producers is over and the demand reduction has tapered.

He was speaking at the India Energy Forum by CERAWeek on Monday.

Responding to a question on how he sees the oil market today and where it is in terms of demand recovery, Salman said: “The recovery has happened in a way. Let’s not forget we went as deep in terms of consumption. There are people who say there was 23 to 25 million barrels per day of reduction of demand. I have never seen anything like this.”

“Now people say we are in the ballpark of 6-8 million barrels per day of demand reduction. Compared to growth, there is a shortage of 8-9 million barrels per day. The discipline that we have put in as OPEC+ is very laudable,” he added.

Commenting on the Covid-19 pandemic, he said, “The worst part is over; we are very cognizant of any potential remnants (of a recurrence of Covid-19)…We are still losing people because of Covid-19, both in India and Saudi Arabia. India is still suffering from growth of numbers as well as we are.”

“We are very much vigilant. I think it is a big shift in terms of where we are today and where we were in April and May,” he added.

Sharing his views on the commentary regarding peak oil demand, Salman said, “The ten years of the late 80s to the 90s were the so-called ‘incubator’ of higher oil prices. My theorem about that-low oil prices bring higher oil prices and high oil prices bring low oil prices. It’s cyclical.”

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Published on October 26, 2020
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