Global oil price to drop due to growth of eco-friendly car production - analyst

Economy Materials 24 June 2021 16:43 (UTC +04:00)
Global oil price to drop due to growth of eco-friendly car production - analyst

BAKU, Azerbaijan, June 24

By Sadraddin Aghjayev - Trend:

The principles of sustainable development and responsible consumption in the transport sector, amid the global trend towards decarbonization, have formed a capacious niche for electric and hydrogen transport, Deputy Director of the International Institute for Energy Policy and Diplomacy of the Moscow State Institute of International Relations, expert of the Institute’s Sustainable Development Center, Igbal Guliyev told Trend.

“Since 2018, the EU has banned the latest generation of diesel vehicles, which has become a turning point in the development of the electric car market, as well as hybrid and hydrogen engines,” Guliyev noted.

“A gradual increase in the share of clean (decarbonized) energy carriers in the global energy balance will one way or another lead to decrease in the share of fossil fuels, including oil. The International Energy Agency estimates that in the transport sector, the share of electric vehicles in the world as a whole will increase to 7 percent by 2030 and to 44 percent by 2050. The share of hydrogen transport will increase to 1 percent by 2030 and to 16 percent by 2050. At the same time, from 2020 to 2050, the share of oil in the transport sector will decrease from 91 percent to 12. Perhaps this is a rather bold forecast, but the trend towards an increase in the share of environmentally friendly transport is already evident at the present time,” Guliyev said.

“So, in the ecological zone of Madrid, unlimited stay is allowed only for electric vehicles. Cars with hybrid engines can stay in it for no more than two hours, cars running on gasoline that were produced after 2000 and cars with diesel engines built before 2006 are only allowed to enter for parking in a public parking lot, and older cars with internal combustion engines the entrance is completely closed. In a number of cities, such as Milan, entry to the center for electric vehicles is free, while owners of cars with internal combustion engines have to pay. In countries with a rather harsh, northern climate - Iceland and Norway - the share of electric vehicles is constantly increasing. For example, in Norway in 2018 it was 31.2 percent, and by 2019 it reached 42.4 percent,” the expert said.

“The introduction of environmental restrictions for entering the historic city center has already been discussed in Moscow. Electric cars will account for 35 percent of all car sales, according to a Bloomberg New Energy Finance study. By 2030, Jaguar and Land Rover plan to bring the number of electric cars in their lines to one hundred percent, the expert added.

Guliyev also said that it is too early to draw conclusions regarding the dynamics of world consumption of oil products in transport.

“To this the moment, oil prices have stabilized, and it is logical to assume that in the foreseeable future they will remain at an average level (about $50-60 per barrel). But, according to Wood Mackenzie's forecast, global demand for petroleum products will begin to decline in 2025 due to the growing popularity of electric vehicles, and by 2040 the share of electric vehicles and hybrids in the global new car market will reach 38 percent. According to the IEA's long-term forecasts, oil prices will drop to $35 per barrel by 2030, and to $ 25 per barrel by 2050. But these are only forecasts so far,” added Guliyev.


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