Daily Management Review

IEA forecasts growth in demand for oil and gas until 2040


11/14/2018


Despite the growing popularity of renewable energy sources, oil and gas will remain the main energy sources until 2040, according to a report by the International Energy Agency (IEA). Demand for oil as automotive fuel will begin to fall from the mid-2020s, but other forms of transportation and petrochemistry will compensate for this decline. At the same time, the lack of investment in production can cause a sharp rise in prices, the agency warns. According to the organization, gas consumption will grow significantly - by 45% of the current level - and will be provided primarily by the Asian market.



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The demand for energy will increase by a quarter by 2040 with its more efficient consumption, the IEA global forecast to 2040 says. The main increase in demand will be ensured by developing countries (in particular, it will double in India); in the USA the demand will remain at the same level, and will decrease in Europe and Japan. Asia will have 80% of the new demand for oil, half for gas and almost 100% for coal and nuclear energy, the agency expects. As a result, the share of oil and gas trade in the region will increase from the current 50% to two-thirds.

“The world is gradually moving to a new energy system, the cost of solar and wind energy is decreasing, while oil has risen again, the share of final electricity consumption is growing (by 2040 it will grow from 20% to 25%, this implies an increase in demand by 60%)” - the agency notes. The share of coal in this case falls from 40% to 25%, while renewable energy (in the optimistic scenario), on the contrary, grows from 25% to 40%.

By 2040, the demand for oil in the scenario involving implementation of the already announced reforms will grow by 11.5 million barrels per day (bpd). At the same time, until 2025, the growth will be 1 million bpd annually, after that - an average of 250 thousand bpd. Peak demand until 2040 will not be passed, although in developed countries, consumption will decline by an average of 400,000 bpd annually (mainly due to a reduction in automotive fuel). The demand for oil as a fuel for cars will be at its peak by the mid-2020s (despite an increase in the number of cars by 2040 by 80%, to 2 billion units). 300 million electric vehicles will help to avoid an increase in oil consumption by 3.3 million bpd, and an increase in the efficiency of other cars - by 9 million bpd. At the same time, the fleet of aircraft and vessels will form demand for petrochemistry. China will become not only the largest importer, but also a consumer of oil, ahead of the United States. On the supply side, the United States will provide 75% of the increase in supply by 2025, but after that, OPEC countries will have to meet growing demand. At the same time, the IEA warned, the current volume of investment in mining will not be enough and prices in the market in the next decade can break new records.

Gas may become the second after oil in terms of the share of use as an energy source by 2040 (overtaking coal). World gas demand will grow by 1.6% per year until 2040, its consumption will grow by 45% compared with the current level. China will become not only the largest importer, but will also come close to the level of the European Union in 2040 - gas consumption in the country may grow threefold by this time.

source: iea.org






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