Baku, Azerbaijan, Nov.16
By Leman Zeynalova – Trend:
Growth in global oil demand will top 103 million barrels per day by 2040, the International Energy Agency (IEA) said in its World Energy Outlook 2016 report released Nov.16.
Over the longer term, oil demand concentrates in freight, aviation and petrochemicals, areas where alternatives are scarce, while oil supply – despite a strong outlook for US tight oil – increasingly concentrates in the Middle East, said the report.
According to IEA estimations, the total demand from members of the Organization for Economic Co-operation and Development (OECD) will fall by almost 12 million barrels per day to 2040, but this reduction is more than offset by increases elsewhere.
India, the largest source of future demand growth, sees oil consumption rise by 6 million barrels per day by 2040, said the report.
“The world becomes increasingly reliant on expansion in Iran (which reaches 6 million barrels per day in 2040) and Iraq (7 million barrels per day in 2040) to balance the market,” said IEA. “The focus for oil trade shifts decisively to Asia: the United States all but eliminates net imports of oil by 2040.”
IEA analysts forecast that by the mid-2030s, developing countries in Asia will consume more oil than the entire OECD.
A near-term risk to oil markets could arise from the opposite direction – a shortfall of new projects – if the cuts in upstream spending in 2015-2016 are prolonged for another year, according to the report.
“We estimate that, if new project approvals remain low for a third year in a row in 2017, then it becomes increasingly unlikely that demand and supply can be matched in the early 2020s without the start of a new boom/bust cycle for the industry,” said IEA.