The IEA warns global oil demand will drop by $324 million a day in 2020, the biggest decline in history, before a rapid rebound in 2021

• The International Energy Agency, in its closely-watched oil market report, predicted that global oil demand will drop by 8.1 million barrels a day this year, the biggest decline in history.
• Demand is expected to rebound by a record 5.7 million barrels a day in 2021, IEA said.
• The agency adjusted its previous forecast of global Brent demand falling by 9.1 million barrels a day as better-than-expected deliveries took place amid easing lockdowns.
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The International Energy Agency has warned that global oil demand will see its largest decline in history across the entirety of this year, but sees a "more stable footing" by the end of the second half of 2020, and a recovery in demand by 2021.

The IEA's June estimates reckon that global demand for Brent oil will drop by 8.1 million barrels a day this year — lower than its previous forecast of 9 million, but still the biggest annual fall in demand on record.

At current prices, a decline of 8.1 million barrels per day represents around $324 million.

Demand should recover by 5.7 million barrels per day in 2021, the Paris-based agency said.

The revised forecast for oil demand is based on stronger than expected deliveries of oil during the COVID-19 lockdown.

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Following gradual economic reopenings in some parts of the world during the slowing of the COVID-19 outbreak, China's demand was close to its 2019 levels in April, the IEA said, owing to its strong exit from lockdown measures. India's demand rose sharply in May, according to the IEA's statement.

Oil demand has crashed in 2020 as lockdowns around the world stifle the need for oil to make fuel products and products using in manufacturing. Demand has slowed so sharply that in April, oil prices briefly turned negative, a first in the commodity's history.

Meanwhile, air transport is not expected to recover anytime soon. Passenger traffic in 2020 is likely to be 55% lower than in 2019 and will continue to weigh on oil demand through next year, the IEA said, citing data from the International Air Transport Association.

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Recent initiatives by the Organization of Petroleum Exporting Countries and its allies have helped bring some stability to the market and if this production trend continues, it could help speed up a rebalance in oil markets, IEA said.

The agency concluded by saying that "enormous uncertainties" should not be underestimated.