RIO DE JANEIRO – The Covid-19 pandemic marked the year 2020, leading to a significant volatility in oil demand, supply and prices. The fight against the virus and ensuing economic crisis led to calls for recovery-programs to be directed towards a less carbon-intensive economy, with the fight against global warming at the background. This would inevitably lead to a peak in oil demand in the near-term and lower oil prices for the foreseeable future.
However, completely replacing oil from several sectors is expensive and hard, and for many cases still requires more investments into technologies and mass marketing of alternative solutions. Oil demand will therefore recover, albeit gradually, and this will require further exploratory investments. These will have to be higher than current investment levels. This will most likely increase prices, so as to incentivize these necessary investments.
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