TO WATCH: War, virtually. Covid-19 promises to spur defence strategists’ use of virtual
reality for war-gaming. “Synthetic environments” offered by the likes of SoftBank-
funded Improbable help planners model responses not just to conventional threats but
to a rampaging killer virus. Surely it could never happen.
Energy
Energy demand collapsed during the pandemic. Crude-oil consumption fell as
consumers and companies were locked down and oil-guzzling sectors such as travel
were hit hard. As the world economy picks itself up, pent-up demand will help the
global appetite for oil recover slightly, by 5%, to an average of 96m barrels a day in
- America and China, the two biggest oil addicts, will match this rate. Asia will be
the source of over 60% of new oil demand in coming years.
Oil companies have the tricky task of matching output to the uncertain economic
trajectory. America’s shale producers are the chief losers from low prices. As billions of
dollars of their low-grade debt comes due in 2021, expect more bankruptcies; this will
contribute to a plateauing of US output. The OPEC-Russia deal to cut 5.8m barrels a day
from oil markets in 2021 will prop up prices, though backsliding is inevitable among
Russia’s powerful private-sector oil firms. Still, political strife in Iran, Libya and
Venezuela will help restrain supply. The price of benchmark Brent crude will limp to an
average of $45 a barrel in 2021.
Oil’s tumble has dragged down prices for liquefied natural gas. LNG’s cheapness will
help boost demand by nearly 5%. A further increase will be driven by the continuing
shift from coal-fired to gas-fired power plants. Low prices for fossil fuels will tarnish
hopes that the post-pandemic world will have a green tinge, though solar power and
wind-energy production will again swell at double-digit rates.