Worst is behind us, says Saudi Aramco chief as he expects rebound in oil demand

RIYADH — Saudi Aramco's chief executive Amin Nasser expects rebound in global oil demand in the second of half of the year as more countries are moving to ease stringent coronavirus measures, saying: "The worst is behind us."

Amin Nasser made the remarks in the latest edition of CERAWeek Conversations.

In a conversation with Daniel Yergin, vice chairman, IHS Markit, Aramco CEO said that already-recovering demand has him “very optimistic” for the second half of 2020 and that countries are now better prepared for the second wave of COVID-19 if and when it occurs.

Exuding a sense of confidence and optimism, Nasser said: “The worst is behind us. We went from -$40 to +$40 with WTI. In April we were looking at a demand of about 75-80 million barrels per day with significant supply at that time. Currently, you are looking at almost close to 90 million barrels per day. I’m very optimistic about the second half of this year.

We see it in China today — it’s almost 90 percent. In gasoline, it’s around 95 percent in China. Gasoline and diesel are picking up to pre-COVID levels. Jet fuel is still lagging in terms of less air travel. More countries will start opening up. So, we see that reflected in the demand on crude.

“There are different forecasts looking at between 95 and 97 million barrels per day by year-end. So, it will all depend on whether there will be a second wave of coronavirus or not. But I am also not as concerned about a second wave because I think we are much better prepared now. All countries, all medical establishments are much better prepared. We learned a lot during the first wave.”

Nasser's expectations are in line with the most recent demand forecasts from the IEA and OPEC, which expect demand this year averaging 91.7mn b/d and 90.6mn b/d respectively. Based on all these optimistic projections, the fall in demand will be around 10 percent from last year's levels, reflecting the huge economic effect of the Covid-19 pandemic.

The IMF's most recent update to its World Economic Outlook (WEO) forecasts a 4.9 percent decline in global GDP this year, down from a projected 3 percent drop in its April outlook.