An extension of the COVID-19 pandemic could further delay the recovery of global energy demand by two years due to the impact of the virus on the economic activity, the International Energy Agency (IEA) said on Tuesday. In its annual World Energy Outlook (WEO), the agency warned of COVID-19 would leave a lasting impact on the energy sector, but it also viewed the crisis as an opportunity to tackle challenges facing governments and their efforts to achieve climate goals. Indeed, the IEA report makes recommendations for "net-zero-emissions" that would balance the energy mix and choices for countries. "Only faster structural changes to the way we produce and consume energy can break the emissions trend for good. Governments have the capacity and the responsibility to take decisive actions to accelerate clean energy transitions and put the world on a path to reaching our climate goals, including net-zero emissions," IEA Director General Fatih Birol said in the report. The IEA cautioned that a rebound in global energy demand is dependent on the coronavirus being overcome. In its policy review, which reflects intentions and targets today, "global energy demand rebounds to its pre-crisis level in early 2023. However, this does not happen until 2025 in the event of a prolonged pandemic and deeper slump, as shown in the delayed recovery scenario developed by the Paris-based agency." Before the crisis, oil demand was expected to rise above 100 million barrels per day this year but at least nine percent has been already shaved off that figure. "Slower demand growth lowers the outlook for oil and gas prices compared with pre-crisis trends. But large falls in investment increase the risk of future market volatility," the WEO report said. The impact on fossil fuels is varied, according to the IEA, with coal losing out most in this crisis and with different scenarios for oil and gas. Demand for natural gas "grows significantly, mainly in Asia, while oil remains vulnerable to the major economic uncertainties resulting from the pandemic," it was indicated. "The era of global oil demand growth will come to an end in the next decade," Birol said. "But without a large shift in government policies, there is no sign of a rapid decline. Based on today's policy settings, a global economic rebound would soon push oil demand back to pre-crisis levels," the IEA chief remarked. — KUNA
