COVID vaccine key to structural rebound in global economy and oil demand
This year has been tough for the majority of industries and especially for oil production. Near-term prospects are also murky, as oil demand is not likely to fully recover even at the end of 2021. Thus, the industry’s greatest hopes are associated with vaccine development.
The release of a vaccine to combat COVID-19 will prove to be the determining factor towards unlocking the global economy and with it, oil demand, considers Hellenic Shipping News Worldwide. According to Gibson Shipbrokers, shipping is only one of the long list of industries that have been hit hard by COVID-19. The International Energy Agency does not expect oil demand to fully recover next year. Even by December 2021, consumption is likely to remain notably below December 2019 levels, says the agency blaming primarily “a weak outlook for aviation, as air travel is likely to remain severely curtailed until a vaccine is found”. Thus, the only real prospect for a structural rebound in the global economy and oil demand is linked to the race for successful vaccine development, says Gibson.
Among over 170 vaccine candidates in development, there are nine in final large-scale trials (stage 3). Four Chinese companies were meant to start final trials in July-August, while Russia’s Gamaleya Research Institute was supposed to begin large-scale clinical trials in late August. Germany’s BioNTech in collaboration with America’s Pfizer and China’s Fosun Pharma expect to see preliminary results of stage 3 trials by October. British-Swedish AstraZeneca and the University of Oxford announced their vaccine candidate could be ready by Christmas despite a recent pause in clinical trials. Pfizer stated that it would seek emergency use authorisation immediately after preliminary effectiveness data were available.
Overall, with so many vaccines being in final stages, experts appear to be confident that at least one will be successful, says Gibson. There may certainly arise some contingencies and more temporary pauses as with AstraZeneca’s candidate vaccine. Even in case of successful trials, the world may not see the vaccine in November or December 2020 due to logistical challenges in terms of manufacturing and global distribution. Nonetheless, there is indeed a growing likelihood that vaccines will become widely available from spring next year, considers Gibson adding that it may give a colossal boost to the global economy and help the recovery in oil demand. “Business travel could still remain at restricted levels, but surely there is so much pent-up demand in many of us for leisure travel and things we haven’t done for a long time!”, the shipbroker concluded.