When oil market will be more dependent on Middle East?
Baku, Azerbaijan, Nov.14
By Leman Zeynalova – Trend:
Once US tight oil plateaus in the late 2020s and non-OPEC production as a whole falls back, the market becomes increasingly reliant on the Middle East to balance the market, the International Energy Agency (IEA) said in its World Energy Outlook.
As for the expected oil demand, IEA experts believe that with the United States accounting for 80 percent of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, the world’s consumers are not yet ready to say goodbye to the era of oil.
“Up until the mid-2020s demand growth remains robust in the New Policies Scenario, but slows markedly thereafter as greater efficiency and fuel switching bring down oil use for passenger vehicles (even though the global car fleet doubles from today to reach 2 billion by 2040),” said the report.
IEA analysts state that powerful impetus from other sectors is enough to keep oil demand on a rising trajectory to 105 million barrels per day by 2040: oil use to produce petrochemicals is the largest source of growth, closely followed by rising consumption for trucks, for aviation and for shipping.
“Even with a rapid transformation of the passenger car fleet, reaching a peak in global demand would require stronger policy action in other sectors. Otherwise, in a lower oil price world, consumers have few economic incentives to make the switch away from oil or to use it more efficiently,” said the report.
Meanwhile, with projected demand growth appearing robust, at least for the near term, a third straight year in 2017 of low investment in new conventional projects remains a worrying indicator for the future market balance, creating a substantial risk of a shortfall of new supply in the 2020s, according to IEA.
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