Baku, Azerbaijan, Oct.12
By Leman Zeynalova – Trend:
Substitution of oil in the transport sector is not yet imminent and is not expected to reach more than 5 percent for the next five years, according to the World Energy Resources 2016 report.
“Oil remains the world’s leading fuel, accounting for 32.9 percent of total global energy consumption,” said the report. “Despite the temporary price drop, the fundamentals of the oil industry remain strong.”
The report said that the growth of population and the consumer class in Asia will support oil demand increase and the main increase in consumption will come from transportation sectors.
Several structural changes are underway in the oil industry: the emergence of non-OPEC supply, the trends in energy efficiency, the diminishing role of high-sulphur oil with the environmental pressures in the marine fuel industry and in the power generation sector, and the emergence of unconventional oil (shale oil, heavy oil, tight oil and tar sands), and increased production both from mature and frontier fields, according to the report.
The main drivers of price changes have been the gradual building up of OPEC spare capacity and the emergence of non-OPEC production, especially US Light Tight Oil (LTO), said the report.