Oil demand to peak this decade: IEA

NEW The OIL 2023 is out and looks at how oil markets are set to evolve over the next 5 years. There are few things striking for me and just sharing takeaways

Energy transition kicking in for oil consumption prospects, but we are still dealing with deceleration of GROWTH signalling that we have in front of us record high demand every year

China is as always the wild card of the system. How its consumption will evolve is set to have major impact. But developments in india too will matter a lot

On supply side the world seems splitting responsibilities. More production growth coming from non-OPEC countries, including US, Brazil and Guyana, while OPEC ones will cover the expansion of spare capacity (then things will likely be not so net…)

Investment - difficult to make a one to one comparison, but a striking evidence is that the world today produce much more oil than what produced about a decade ago with upstream investment being significantly lower. Three oil price crashes in less than 10 years made the industry to learn the lesson…

Production growth is one side of the world (Atlantic) and refinery capacity moves to East of Suez. Trade of oil (and products) get more and more interesting….

Much more on IEA website

#oilgas #energy #data #future #investment #China #India #oilandgas #oott

𝗧𝗵𝗲 𝗪𝗼𝗿𝗹𝗱’𝘀 𝗗𝗲𝗺𝗮𝗻𝗱 𝗳𝗼𝗿 𝗢𝗶𝗹 𝗜𝘀 𝗦𝗲𝘁 𝘁𝗼 𝗦𝗹𝗼𝘄 / World demand for oil is likely to drop off sharply over the next five years, the International Energy Agency said Wednesday, as a shift to electric vehicles and other cleaner technologies brings growth in global oil use almost to a complete halt.

“The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade,” said Fatih Birol, the agency’s executive director, in a news release.

The assessment, which foresees global gasoline use declining after 2026, will make gloomy reading for OPEC and other petroleum producers. It raises the long-debated prospect of “peak oil” — the point at which oil production peaks and starts to decline — but in this case, the leveling off would be because of weakening demand, rather than shrinking petroleum supplies.
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The International Energy Agency, which monitors energy trends on behalf of industrialized nations, predicts that by the end of 2028, more than 155 million electric vehicles will have been sold globally, half of them in China. These vehicles will mean that three million barrels a day of oil a day that might have been consumed will instead remain in the ground.

The agency is actually more positive for oil’s short-term outlook than some other forecasters. The report predicts that world demand will jump by a strong 2.4 million barrels a day in 2023, a modest increase from a report published last month and a view that some analysts consider overly optimistic.

In later years, though, the agency sees growth trailing off, especially in road transportation, thanks to increasing numbers of electric vehicles, the growth of so-called biofuels (which generate energy from sources like agricultural waste and used cooking oil) and greater efficiency.

Gasoline consumption, which accounts for about a quarter of world demand for oil products, will decline after 2026, the agency forecasts.

The growing aviation industry, for which substituting for oil is difficult, and demand for petrochemicals (used to make a wide range of materials including plastic bags, patio furniture and auto parts, among other things) will be the mainstays of any future growth, the agency says.

The agency said plans for investment in oil and gas production were 47 percent below 2014 levels in real terms, reflecting the prospects of declining growth of oil demand and the impact of the pandemic. However, the industry is expected to increase such spending by 11 percent in 2023.
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Some European oil giants have been allowing their oil output to gradually fall, although Shell said Wednesday that it would keep production steady until the end of the decade in order to keep raking in cash.

Source: The New York Times

***INFOGRAPHIC: How EV Adoption Will Impact Oil Consumption (2015-2025P)***