The IEA predicted peak of world oil demand not before 2040

Annual report of the IEA entitled World Energy Outlook, presented November 16, challenges the assumption that the peak of world oil demand has already 5-15 years. According to IEA, “the era of fossil fuels is far from complete.”

“Oil demand will grow more slowly than in the past, but still will grow”, — said the Executive Director of the IEA, Fatih Birol (quoted by Financial Times). Global oil consumption will continue to increase until 2040, because oil is difficult to replace in road freight, aviation and petrochemicals, according to the materials of the IEA to the report. Although the world’s fleet of electric vehicles, according to the basic scenario of the IEA, will increase from 1.3 million last year to 150 million in 2040-m, that is, more than a hundred times, it won’t be enough to stop the growth in the use of oil.

Earlier in November, CFO of Shell, Simon Henry drew attention for his statement that, from the point of view of his company, the peak of the global oil demand will be achieved “somewhere in between five or 15 years.” And the Organization of countries-exporters of oil (OPEC) in its forecast, published last week, said that the demand will peak in 2029, and then begin to decline if all countries that signed the Paris agreement on climate change implement plans to reduce greenhouse gas emissions.

The IEA considers three scenarios for the development of supply and demand in the oil market until 2040. The basic version (the”new policies scenario”) takes into account the promises of the countries in the framework of the Paris agreement, “nationally determined contributions” to reducing emissions (Nationally Determined Contributions, NDC). In this scenario, global oil demand in 2040 will increase by 12%, to 103.5 million barrels. a day, compared with 92.5 million last year. The largest share of demand growth over this period will provide India and China will become the largest oil consumer, ahead of the U.S. by the beginning of 2030-ies.

In a more ambitious “450 Scenario” (intended to limit greenhouse gas concentrations in the atmosphere at 450 parts per million of carbon dioxide equivalents. —) the number of electric vehicles on roads by 2040, increasing to 715 million, oil is partially replaced by biofuels. In this scenario, global oil demand peak by 2020 (at a little over 93 million barrels. per day), and then decreases faster and faster, reports Reuters. According to The Wall Street Journal, this scenario seems less realistic after the victory of Donald trump in the presidential election in the United States. Trump has called climate change a “fake” and promised that the US will come out of the Paris agreement.