The impact of the fall in crude oil prices
May 27 2020
What's new in the energy sector?
The Coronavirus crisis has led to a drastic drop in energy consumption worldwide, never seen before in peacetime. The global drop in demand over the year 2020 will be in the order of 5 to 10%. According to the IEA, the International Energy Agency, the demand for oil is expected to decrease by 8%, coal by 9% and gas by a large percentage that is still impossible to quantify precisely. It is the demand for electricity that will decrease the least, because it is a good and a service that is more and more necessary. Moreover, it is likely that the production of renewable energies will increase further in 2020. You will find enclosed a reflection on electricity consumption.
Will we soon return to "normal" consumption? Opinions differ and much will depend on the evolution of the pandemic. If this pandemic runs out of steam, we can bet on a return to 2019 consumption in the course of 2021. Of course, energy consumption is not an end in itself and the reduction of fossil fuel consumption has beneficial effects on the environment. But there is a very strong link between economic activity and energy consumption and the ideal situation would be a return of economic activity to its pre-crisis level while developing energy savings. Let's dream a little
The oil market has recovered, helped by the decision of producing countries to massively reduce extractions and by the disastrous economic situation of American shale oil producers whose production costs are very high and who have no other solution than to close some wells. It is likely that crude oil prices will remain low at least until the end of the year, which is good news for consumers but ... not for producers. Some development projects are likely to be delayed, but the world will still need hydrocarbons for some decades to come.
This will not prevent, I repeat, the development of renewable energies and the growth of solar and wind energy in Africa will remain sustained.
Our conference: the impact of falling oil prices on African economies was a great success.
More than 100 people participated in this video-conference. After the success of the conference on the impact of Chinese companies in Africa which took place on Monday 13th April (The Newsletter summarizing the presentations and debates of this conference has just been posted on the website). The presentations by Francis Perrin, James McCullagh, Djibril Kanoute, Idrissa Bodian and Fary Ndao were followed by a rich and lively debate. You will find the presentations on the site.
I would like to remind you that the next SIEPA, which was to take place on 16, 17 and 18 June in Dakar, has been postponed to 17 and 18 November if the health situation allows it. We are considering a slightly different formula for this year (held in Saint Louis with a focus on sectors that are of particular concern to the region: development of renewables, development
Best regards to all and protect yourselves
de l'Énergie en Afrique