Written by Miguel Van Damme
The massive impact of the COVID-19 pandemic on the economy intensifies the risks of tightening crude oil supply coming years. The temporary drop in consumption has a positive effect on available oil in the short term. Without a radical OPEC decision to cut production, the production surplus will maintain prices at low levels for many months, further weakening the industry and those who depend on it.
Declining oil supply
Worse, announcements of a few million additional barrels from Saudi Arabia or Russia could suggest that global production capacity is easily scalable, up or down. This is only true from the relative flexibility of the Saudi fields already in production. As soon as the natural decline in field productivity will need to be compensated for by the exploitation of new discoveries, latency will be felt very quickly, the average time between discovery and their production being two to four years. The current oil surplus situation could then quickly turn around in an oil shortage.
HSBC, among others, estimates that roughly 80% of the 100 Million Barrel (MBD) produced each day  come from files with a natural declining output (-4% to -8%/year). In addition, the International Energy Agency already warned that the main source of production growth was American shale oils.  However, these are one of victims of the current Russian-Saudi price war. As we are cutting investment in the exploration and production of new fields and weakening the American shale oil producers, where will the oil of tomorrow come from?
At less than US$45 a barrel, it is hard to imagine the future of the energy sector calmly. First, insufficient investment could jeopardize the possibility of ensuring continuity of oil supply in the medium term. But it also risks delaying short-term funding for low-carbon energies which, unsubsidized, will become de facto less attractive for end users drowned in inexpensive fossil fuels.
Looming shortages post-crisis
A likely outcome of this health and economic crisis would be to transform in depth, a globalized oil-depend model. Thanks to the COVID-10 pandemic, the lower consumption of energy and fossil resources translated in an immediate reduction in air pollution in China or Italy. Reducing oil consumption and putting a brake on exploration could then be the first concrete beginnings for strong commitments in the fight against and adaptation to climate change.
But another scenario is looming on the horizon, even more likely: that low oil prices will revive the economic machine as soon as the COVID-19 crisis comes to an end. The rebound effects will bring back oil consumption at pre-crisis levels and beyond. In this case, the risk of oil shortage and price spikes are real. 
As such, oil dependent organizations (countries, companies, etc.) need more than ever to make radical shifts towards sustainability and reduce their dependencies. Large – oil dependent – companies such as Maersk, Delta Airlines, Microsoft, Total or ENI recognized the problems and made the first (baby) steps.
Don’t wait until it’s too late.
 Brent reached 23US$/barrel on March 30, 2020 https://oilprice.com/Energy/Energy-General/Relentless-Oil-Price-War-To-Cause-Huge-Number-Of-Well-Shut-Ins.html
 Saudi-Russia oil war is a game theory masterstroke https://www.ft.com/content/1da60fa2-3d63-439e-abd4-1391a2047972 https://www.lesechos.fr/idees-debats/cercle/opinionchoc-petrolier-un-coup-de-maitre-de-larabie-saoudite-et-de-la-russie-1190732
 Oil Majors slash spending in oil market crunch https://www.upstreamonline.com/finance/majors-slash-spending-in-oil-market-crunch/2-1-780438
 HSBC analysis in 2017 explaining tension between https://www.lemonde.fr/blog/petrole/files/2017/01/HSBC-peak-oil-report-2017.pdf
 Belgium energy mix https://economie.fgov.be/nl/file/5577/download?token=7wkhrbow
 Financial Times in July 2007 warning for a soon to come oil crunch (that happened in 2008 and 2012) due to fast declining supply in mature areas, such as the North Sea or Mexicohttps://www.ft.com/content/2d97d75a-2e0c-11dc-821c-0000779fd2ac