10 April | 2020 Extraordinary G20 Energy Ministers Meeting Dr Sun Xiansheng , Secretary General IEF
COVID-19 oil market volatility dwarfs that of the Global Financial Crisis (GFC) US$ USO VIX Brent and WTI vs CBOE US Oil Volatility Index USO VIX 200 350 COVID-19 300 150 250 100 200 150 50 100 GFC 0 50 -50 0 5/15/07 5/15/08 5/15/09 5/15/10 5/15/11 5/15/12 5/15/13 5/15/14 5/15/15 5/15/16 5/15/17 5/15/18 5/15/19 Brent (LHS) WTI (LHS) USO VIX (RHS)
Ready to address the challenge The IEF platform stands ready to help producer and consumer countries to: • Respond to excessive energy market volatility and distortions • Assert all efforts to stabilise energy markets • Boost market confidence in support of secure and sustainable growth
Demand fall out surpasses thresholds COVID-19 disrupts energy balances beyond thresholds and storage limits • Oil consumption falls to unprecedented lows and will take time to recover • Global inventories set to rise to capacity in the short-term • Even in a swift recovery markets will need time to clear the overhang • Will investment deferrals lead to an upswing in the post-pandemic era?
Energy dialogue and transparency To overcome unparalleled risk to energy security and orderly transitions: • Improve market transparency, especially on inventories and strategic stock in Non-OECD region through JODI and Trilateral Work Programme • Broaden dialogue at IEF17 Business and IEF17 International Energy Forum scheduled on 25-26 September prior to G20 Ministers Meeting • Strengthen energy market governance through public-private and inter- institutional dialogue and collaboration on IEF and G20 platforms
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