BAKU, Azerbaijan, Oct.23
By Leman Zeynalova – Trend:
Global diesel demand will be supported by rising industrial activity in Asia over the coming years, before declining from around 2027 in tandem with slower industrial activity growth, Trend reports citing Capital Economics, UK-based research and consulting company.
“The shift away from diesel cars in Europe and greater use of renewable energy in industry globally will add to the downward pressure on consumption. The ongoing electrification of buses across the world and the use of hydrogen as a source of fuel in industry and in trucking will weigh on diesel demand.
“In emerging economies outside of China, we expect demand to rise in tandem with growth in economic activity and the population. However, this will not offset falling demand elsewhere. And, in any case, we also expect growth in demand in EMs to turn negative in the early 2030s as they adopt more renewable energy. Overall, we estimate that global diesel demand will stabilise at around its current level of 28m bpd for the next few years before falling to around 13m bpd in 2050.
“Approximately 7 percent of global oil demand is accounted for by fuel oil, of which marine (bunker) oil accounts for just over half. We anticipate that bunker fuel demand will fall steadily throughout the forecast period. The introduction of new marine fuel regulations (IMO 2020) has mandated that the use of high-sulphur fuel oil is displaced by lower sulphur fuels such as diesel.
“As mentioned earlier, we thought ‘globalisation’ had peaked even before the pandemic. The virus outbreak will probably just hasten the decline of global trading activity if companies seek to shorten their supply chains. What’s more, the adoption of new technology (such as 3D printing), may also limit the need for crossborder shipments and weigh on demand for marine oil more generally. In the longer term, we think that LNG will increasingly be used as a shipping fuel, as it is a much cleaner fuel. Moreover, it is likely that marine fuel standards will be tightened again in the coming decades. We estimate that fuel oil demand will shrink to just 4m bpd in 2050, down from 7m in 2019,” reads the report released by Capital Economics.
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