The largest decline in global energy investment ever recorded is expected this year as the coronavirus pandemic takes its toll on the industry, according to a new analysis from the International Energy Agency (IEA).
Overall, the IEA determined that energy spending will decline by one-fifth, or nearly $400 billion, from 2019.
The U.S. could face an even sharper decline of more than 25 percent in 2020, which the report attributed to the fact that a greater share of nation’s energy comes from oil and gas.
The global oil and electricity sectors are likely to be hit hardest, the IEA found, with spending on oil expected to fall by more than $1 trillion this year and power sector revenue expected to drop by $180 billion.
The report also stated that consumer spending on electricity for the first time will be greater than it will be on oil.
The IEA noted that at the beginning of the year, it expected to see a 2 percent increase in energy expenditures, which would have been the greatest increase since 2014.
“The spread of the Covid-19 pandemic has upended these expectations,” the report said.
Energy demand has dropped during the pandemic as many people are traveling less. The IEA has previously found that global carbon dioxide emissions are expected to drop by 8 percent this year.
That report noted that the “most carbon-intensive fuels experienced the largest declines in demand” during the first three months of 2020.