With the COVID-19 pandemic, more countries are introducing social restrictions that subsequently decrease oil consumption. Over the next few weeks, the decrease in demand for oil could reach up to 15-20 million less barrels of oil a day. Experts are also unsure if and when increased oil demands will resume again. Just like the Coronavirus itself, this economic shift is unprecedented. What’s more, the breakdown of the Saudi-Russia agreement, which intends to limit the output of oil, places the economy in further uncertainty.
This year, an estimated 1 million oilfield service industry jobs are projected to be terminated. This number represents 21% of workers around the world. Cuts to oil prices will account for 13 of these percentage points. With the impending price collapse, 5 million people working in the oil sector, globally, will be affected. Contractors aiming to prevent the transmission of COVID-19 on their jobsites are likely to layoff approximately 8% of employees.
On the bright side, the solar industry is anticipated to expand growth as a renewal resource. Renewable energy sources such as wind and solar have seen a steady increase from 18% to 21% from 2019-2020. In fact, solar farms are inexpensive to operate compared to power plants, which utilize fossil fuels. Stanford University’s Steyer-Taylor Center for Energy Policy and Finance’s founding executive director, Dan Reicher stated of COVID-19, “This will be a bump in the road…Renewables are on a growth trajectory today that I think isn’t going to be set back long term.”