The serious health and economic crisis that humanity is going through has hit most countries and societies indiscriminately. As of mid-May, 54% of the population, 60% of GDP and 81% of the global workforce were subject to some form of lockdown[1].

As a consequence of social isolation, a measure pointed out by the World Health Organization as the most effective in the face of Covid-19’s high degree of contagion [2], the global economy must prepare for a depression of dimensions only seen in the great crisis of 1929. In effect, macroeconomic projections point to a contraction in the global level of activity, measured by GDP, of the order of 3% for the world, 5.9% for the USA and 5.3% for Brazil [3].

In addition to the brutal demand shock resulting from the economic downturn, the energy sector also faces the consequences of excess supply, stemming from a dispute over market share by two of the biggest oil producing powers, Saudi Arabia and Russia. This led the industry to its worst performance in a single month, as Black April [4] is being known, with Brent’s price reduction of around 70% at the height of the crisis, compared to the values ​​of the beginning of the year [5 ].

At the moment, the environment is markedly volatile, given the countless uncertainties. What will be the pattern of the recovery? What are the consequences for the future of energy and the transition to a low carbon economy?

Catavento’s article, available for download here, thus proposes to better understand the characteristics of the current crisis, as well as to outline some paths for the future of energy.

If you want to have access to the rich full publication, download it from the EVEx website. (Only available in Portuguese)

[1]  INTERNATIONAL ENERGY AGENCY. Global Energy Review. 2020; OXFORD SMITH SCHOOL OF ENTERPRISE AND THE ENVIRONMENT. Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change. 2020

[2] WORLD HEALTH ORGANIZATION. Coronavirus disease (COVID-19) advice for the public – Protecting yourself and others from the spread COVID-19. 2020

[3] INTERNATIONAL MONETARY FUND. World Economic Outlook, April 2020: The Great Lockdown. 2020

[4] INTERNATIONAL ENERGY AGENCY. Oil Market Report – May 2020. 2020

[5] BLOOMBERG. Brent Crude (ICE) CO1:COM Generic 1st ‘CO’ Future. 2020