Petroleum Africa
Find us on: 
Thursday, March 3, 2022
Release
War in Ukraine could result in as much as 1 million barrels per day (bpd) of oil demand being removed from the global market, Rystad Energy research shows.
The human and material costs of the conflict have been catastrophic just seven days into the military operation. Russia has so far shown no signs of backing down, and prospects of a breakthrough in negotiations appear slim. As a result, investors and markets are scrambling to assess the ramifications of the worsening crisis as the West slaps even more stringent sanctions on Russia, while institutions and companies distance themselves from Moscow.
Oil demand in both Ukraine and Russia is set to plunge if an end to the conflict does not materialize quickly. Ukraine is likely to see the largest drop in relative terms, potentially losing more than 50% of demand so long as the war persists, with long-term implications inevitable due to infrastructure damage and the speed of getting facilities back online once the conflict has come to an end.
Russia also stands to suffer significantly, although the impact in relative terms will be less. The direct and indirect sanctions imposed by the West on Russia’s financial system will reduce economic activity significantly, complicating the process for Russian companies to conduct business internationally and for its citizens to travel abroad. That could result in an oil demand destruction of between 15% and 30% or more.
“The economic fallout from the war – in addition to the humanitarian crisis – is going to be sweeping, both for Russia and Ukraine, and the region’s oil demand is going to take a severe hit if the conflict is prolonged and recently enacted sanctions remain in place,” says Sofia Guidi Di Sante, oil market analyst with Rystad Energy.
For the full release inclusive of data and graphics, visit Rystad Energy’s posting here.
" alt="First LNG Realized at the Greater Tortue Ahmeyim Project">
" alt="United Energy Acquires Western Desert Producer APEX">
" alt="Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG">
" alt="ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System">
" alt="Tullow Highlights 2025 Operational Plans in Ghana">
" alt="TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years">
" alt="Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession">
" alt="Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market">
