Brent price could be 10-40% lower in coming years

Oil&Gas Materials 15 March 2019 10:45 (UTC +04:00)

Baku, Azerbaijan, March 15

By Leman Zeynalova – Trend:

If OPEC members and co-operating non-OPEC resource holders, such as Russia, successfully implement the December 2018 agreement, then demand growth and production declines from existing operations would have to be balanced by production growth from non-OPEC countries, mostly from the USA, Trend informs with reference to the Annual Report of Royal Dutch Shell.

As a consequence, markets could tighten, and prices could rise if supply growth from the USA moderates, according to the company.

“Postponements and cancellations of new supply projects over the last few years could lead to further market tightening in the next few years, given the long lead time of many of these projects. In such a scenario, we believe that the average Brent crude oil price could be 10 percent to 40 percent higher in 2022 than the 2018 average,” reads the report.

On the other hand, Shell believes that the price environment could weaken if OPEC and the non-OPEC resource holders abandon their production cuts, global economic growth slows, or if other non-OPEC producers, such as US shale producers, effectively deliver more and cheaper oil to the market.

“In such a scenario, we believe that the average Brent crude oil price could be 10 percent to 30 percent lower in 2022 than the 2018 average,” said the company.

Shell is an international energy company that aims to meet the world’s growing need for more and cleaner energy solutions in ways that are economically, environmentally and socially responsible.

Shell is a global group of energy and petrochemical companies.

Its operations are divided into our businesses: Upstream, Integrated Gas and New Energies, Downstream.


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