World oil demand will suffer the largest quarterly drop in history because of an unprecedented stoppage in economic activity in China due to the coronavirus outbreak.
Global oil demand in the first quarter of 2020 will be 3.8 million barrels per day lower than a year earlier, a steeper fall than what occurred during the 2009 financial crisis, according to a new projection Wednesday by London-based research group IHS Markit.
The previous largest decline in 2009 saw oil demand fall 3.6 million barrels per day in the first quarter.
Before the coronavirus threatened a global pandemic, IHS Markit projected world oil demand to increase in the first quarter by 0.7 million barrels per day. The volume difference between that initial projection and what it is now is 4.5 million barrels per day.
“This is a sudden, instant demand shock — and the scale of the decline is unprecedented,” said Jim Burkhard, IHS Markit’s vice president and head of oil markets.
Most of the demand decline is in China, but IHS Markit also projects demand elsewhere to fall, including in Europe, Japan, South Korea, the Middle East, and North America.