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Global oil demand to peak in around 2030

Oil&Gas Materials 26 January 2021 09:55
Global oil demand to peak in around 2030

BAKU, Azerbaijan, Jan.26

By Leman Zeynalova – Trend:

The transition towards less oil intensive economic growth has been accelerated by green energy intensive fiscal stimulus and heightened concerns about climate change, Trend reports citing UK-based Capital Economics research and consulting company.

“More specifically, we forecast that global oil demand will peak in around 2030. We think that non-OECD oil demand will continue to grow until the early 2030s, but we expect that the rate of oil consumption growth will slow in the years ahead.

We suspect that COVID-19 has made a medium-term economic slowdown in China even more probable given the further expansion of the state’s role in the economy. What’s more, the pandemic has also added to the economic headwinds facing many other emerging economies in the medium term,” said the company.

At the same time, Capital Economics expects that the global supply is set to remain sluggish. “Weak prevailing demand growth, limited export opportunities and voluntary production cuts by Saudi Arabia should keep OPEC production grounded, at least in the first half of the year.”

Elsewhere, ongoing funding constraints, environmental concerns and weak investment last year should mean that production in non-OPEC countries, such as the US, remains below pre-virus levels, said the company. “That said, we do expect higher prevailing prices to lead to a gradual revival in US production.

Moreover, we expect OPEC+ compliance to start to slip over the course of this year on the back of higher prices and the vaccine-induced rebound in demand. And by 2022 we expect OPEC+ to have largely abandoned its production cuts, which is a key reason why we think that oil prices will fall slightly in that year.”

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Follow the author on Twitter: @Lyaman_Zeyn

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