Natural gas is expected to experience its biggest decline ever in 2020 due to the coronavirus crisis, the International Energy Agency (IEA) warned in a report on Wednesday.
Global demand could fall by 4% this year (or 150 billion cubic metres). That is twice as much as the drop following the global financial crisis of 2008.
Gas had already experienced a slowdown in growth in 2019 (+1.8% compared to 2018), but it benefited from substitution for coal, particularly in China, where the authorities want to improve air quality in major cities.
Consumption was then affected in early 2020 by a mild winter in the northern hemisphere, followed by the new coronavirus (Covid-19) pandemic, which saw containment measures and a fall in economic activity around the world.
“In spite of an expected gradual recovery in 2021, the Covid-19 crisis will have long-lasting impacts on natural gas markets,” the IEA predicted.
Coronavirus is expected to reduce demand by 75 billion cubic metres by 2025, or the equivalent of last year’s growth.
“Natural gas has so far experienced a less severe impact than oil and coal, but it is far from immune from the current crisis,” said Fatih Birol, the agency’s executive director.
“The record decline this year represents a dramatic change of circumstances for an industry that had become used to strong increases in demand,” he added.
The Brussels Times