Experts at the International Energy Agency analyzed the impact of the Omicron strain of the coronavirus on the oil market and came to the conclusion that the new mutation would have a "mild and short-lived" effect on it.
The new variant of COVID-19 will certainly dent the pace of the oil demand recovery, but its impact is unlikely to be significant, the IEA noted. New travel curbs prompted by the Omicron variant will primarily set back the nascent recovery in international flights and affect its number. At the same time, the agency is confident that amid mass vaccination campaigns, demand for fuel used in road transportation and petrochemical feedstock will continue to rise. IEA analysts predict that global oil demand will jump by 5.4 million barrels per day by the end of this year and another 3.3 million barrels per day next year. The recovery is likely to be affected by a new surge in COVID-19 cases, with jet fuel being hit hard, the report said.
S.S.V. Ramakumar, director and board member at India's largest oil and gas company Indian Oil Corporation Ltd, is less optimistic about the future of the oil market. In case of no unusual and unforeseen events, oil prices will continue trading within the range of $70-80 per barrel in 2022, the expert noted. By unforeseen circumstances, he meant the spread of the Omicron strain of the coronavirus. This variant of the virus is very transmissible, but its impact appears to be more muted than that of previous COVID waves, the head of India's energy giant added.
