Global crude oil demand will peak in 5 years: report

Global crude oil demand will peak in 2023, natural gas will become the largest single source from 2026 and it would meet 25 percent of the world’s energy needs by 2050, forecasts Norway-based quality assurance and risk management company DNV GL on Monday.

“Oil will peak in 2023 and coal has already peaked. Solar PV (16 percent of world energy supply) and wind (12 percent) will grow to become the most significant players amongst the renewable sources with both set to meet the majority of new electricity demand,” the report Energy Transition Outlook 2018 noted.

The report predicts the continued, substantial, but declining global crude oil production between 2025 and 2050.

“We forecast production to rise slightly from nearly 83 million barrels per day (mbd) in 2017, excluding natural gas liquids and other liquids, to a high of 85 mbd in 2025 before declining, slowly at first, then more quickly, to hit 43 mbd in 2050,” it noted.

More than half of conventional onshore oil production will likely come from the Middle East and North Africa region by 2050, followed by North East Eurasia including Russia, DNV GL forecasts.

Production from North East Eurasia will decline significantly from 2026, but it will still be the second-largest producing region. Latin America will move into a clear, though distant third place, as output from China declines.

Global spending on energy, as proportion of economic output, is set to slow sharply because the world’s energy demand will decline from 2035 onward, it added.

Also, global refinery oil demand will increase slowly to reach a high by 2025, 3.5 percent above 2018 levels, followed by a substantial 47 percent decline by 2050, it noted, adding that this is due to significantly reduced demand for liquid fuels in the transport sector.

The report also predicts a 30 percent decline in petrochemicals production levels over 30 years, driven by regional transitions in product demand and in feedstock supply, greater use of recycled materials, and reduced demand for single-use plastics.

Among the regional trends that DNV GL foresees, new petrochemical investments in the Middle East will be increasingly based on cheaper liquid feedstocks such as naphtha and gasoil, or mixed gas/liquid feedstock, instead of exclusively on gas.