The global spread of the coronavirus will cause oil demand to drop by roughly 20 million b/d to about 80 million b/d this year, Fatih Birol, executive director of the International Energy Agency, said Thursday.
During an online event organized by the Atlantic Council, Birol said there will be a "significant decline" in global oil demand in Q1 2020 and an "even bigger" decline in Q2 2020 as 3 billion people are unable to travel anywhere for months.
"This will have significant consequences for years to come," Birol said.
On Wednesday, S&P Global Platts Analytics forecast global demand to fall by 4.5 million b/d in 2020, with a 15% demand drop in April and May.
Goldman Sachs this week forecast oil demand to fall by 10.5 million b/d in March and as much as 18.7 million b/d in April.
Birol said he expects US shale production will be particularly hard hit by the historic decline in demand and the expected increase in output from the price war between Saudi Arabia and Russia. Still, he said the recovery in US shale may be faster than most anticipate.
"It will surprise many that shale oil production will bounce back and bounce back strongly," Birol said. "In the meantime, there will be huge suffering in the US shale oil industry."