DUBAI: Amin Nasser, president and CEO of Saudi Aramco, sees an improvement in demand for oil this year, especially in the second half, but he is worried about the risk of a “jobless recovery” for the global economy.
Speaking virtually at CERAWeek, an annual energy conference organized by the information and insights company IHS Markit in Houston, Texas, Nasser said there has already been “quite an improvement” in oil demand compared to the drastic reductions during the pandemic lockdowns last year, especially in China and East Asia.
“Indian demand is almost the same as pre-COVID,” he told oil market expert Daniel Yergin.
“There has been an impact that we see in the West and the US. But with the rapid deployment of vaccines, we are seeing good cause for optimism and recovery in demand.”
Current oil demand is at 94 million barrels, compared with pre-pandemic levels of 100 million, and Nasser expected this to rise to 99 million barrels by the end of the year.
“I see demand and the market improving from here, especially in the second half of this year,” he said.
But Nasser said he expected “harsh realities” as a result of the economic damage from the pandemic, which he described as the “biggest crisis in a century” for the oil industry.
“There has been a huge impact on small- and medium-sized businesses, and more on employment,” Nasser said. “Rapid technology advances were already having an impact on jobs, especially low-skill repetitive-type jobs, reducing jobs and creating inequality in the market in different parts of the world.
“Today we are seeing a recovery taking place and usually this is linked to job creation and higher employment. My big worry over the long term is a jobless recovery where certain jobs are not going to return.”
Nasser said Aramco, the world’s biggest oil company, used risk-management systems to help it respond quickly to the pandemic, which also significantly accelerated its use of digital and remote operating processes.
During the same CERAWeek forum, the CEO of US energy firm Chevron Corp., Mike Wirth, said the key lesson learned from the crisis was the “essential nature” of the oil business.
Despite the unprecedented shock to oil markets, he said demand destruction only amounted to about 9 percent: “This demonstrates how important our industry is to the world economy.”