A couple months into 2020, planes stopped flying, roads cleared out and Zoom took over the world, what did this mean for the oil industry?

The global demand for oil barrels -which had amounted to 100 million per day the year before-, dropped to 29 million a day in 2020.

A lot of major industry players then predicted that oil would never return to what it had been before, making 2019’s figures the peak point in oil history.

It is extremely difficult to recognise shifts in the industry until after they have already happened. However, there seem to be permanent changes in regard to:

– The policies that underpinning Oil and Gas, and

– COVID’s influence in accelerating the transition towards new sources of energy.

Underpinning policies

November saw oil prices rise under the context of positive coronavirus vaccine trials and an increasing demand in Asia.

However, economic policies still condition the extent of oil’s rebound. These policies forecasted a permanent change in societal behaviour. This means, continuous working from home, less traveling and more digitalisation.

BP estimates that “Covid’s impact on oil demand will be from setbacks to the global economy… and one third will be from permanent changes in behaviour.”

Sunshine is the new oil

For almost two decades, the rise of solar power has ben underestimated.

Every year, the rate of growth was expected to level off and that solar installers would stop hiring.

Every year, the opposite happened.

However, this year the International Energy Agency changed the nature of its forecasts. According to them, Solar Energy is the new king of electricity.

Then again, the end state of these forecasts and decisions are not set on stone. If 2020 has taught us something is that there is a big risk in anticipating the future while living in our current, volatile world.