As COVID-19 lockdowns gripped the world in 2020, Bernard Looney, chief executive officer of BP, made a startling admission: He thought that oil demand might never return to its pre-pandemic peak. But recently, Looney has done an about-face.
After announcing ambitious plans to cut emissions, BP, one of the world’s top crude producers, is now plowing more money into fossil fuels. Oil consumption is heading for a record this year, according to the International Energy Agency, which advises major economies. Supply — buffeted by Russia’s invasion of Ukraine, a slowdown in U.S. shale growth and lackluster investment in production — can’t keep up.
It all comes down to China: The world’s second-biggest oil consumer is snapping up crude after reversing its strict Covid-19 policies. Against a backdrop of tight supply, the demand boost has everyone from Goldman Sachs Group to trading powerhouse Vitol Group predicting a rally to $100 a barrel later this year.