BP’s CEO warned that the impact of coronavirus on crude oil consumption will last well after the pandemic, and that demand may never fully recover, in an interview with the Financial Times.
Bernard Looney, who took over from former chief executive Bob Dudley in February, told the FT he believes the coronavirus crisis is “adding to the challenges of oil in the years ahead,” against a backdrop of travel bans and nationwide lockdowns that have led to a rapid drop in oil consumption.
Prior to the crisis, consumption levels were at about 100 million barrels per day, Looney said.
This was the BP CEO’s first formal interview after oil prices plunged below $0 for the first time in history.
“It’s not going to make oil more in demand. It’s gotten more likely to have oil be less in demand,” Looney told the FT, while pointing out that working from home and a fall in inessential travel could endure long into the post-pandemic era.
“I don’t think we know how this is going to play out. I certainly don’t know,” he was quoted as saying. “Could it be peak oil? Possibly. Possibly. I would not write that off.”
Oil experts remain cautious on the commodity’s price fluctuations. Analysts at Goldman Sachs forecast that demand of 2-3 million barrels per day could be wiped out from air travel, and a complete recovery in demand might not be possible before the third quarter of 2022.
Other analysts at the investment bank warned that a mixture of fragile demand, oversupply, and a storage shortage could lead to oil falling below $0 again in May.
Last year, the British oil giant said it expected consumption to increase over the next 10 years before peaking in the 2030s.
Similar to other energy majors, BP posted a 66% drop in its first quarter profits last month, hurt by the pandemic biting into the sector.
Looney told the FT the pandemic had strengthened his “personal conviction” to shift strategies and undertake more low-carbon energy investments as part of the oil giant’s new focus to become a net zero emissions company by 2050.