It is estimated that if fuel consumption is reduced in line with plans to limit global warming, oil prices could fall to about $ 40 per barrel by 2030.
Oil consumption is expected to decline dramatically in 2023 if countries act resolutely to combat greenhouse gas emissions by electrifying transport and industry.
Oil consumption is expected to begin to drop sharply in early 2023, with the drop in demand accelerating from 2 million barrels of oil per day (bpd) to reach 35 million barrels per day by 2050. This represents a 60% reduction in carbon emissions from oil use compared to today’s levels.
Oil consumption reached a record of nearly 100 million barrels in 2019, and is expected to recover strongly this year after being ruined by the coronavirus outbreak last year.
As a result, Brent crude oil prices are expected to average $ 40 per barrel by 2030, under the Accelerated Energy Transition scenario, where oil prices will begin to decline during this decade.
Current prices are around $ 65 per barrel. By 2050, Brent could drop to $ 10-18 a barrel.
If we move to keep global warming (UN-backed) within the 2 degrees Celsius limit set by the Paris Agreement, energy consumption will change profoundly.
Meanwhile, the world’s current policies are still far from in line with the Paris agreement.
The rapid decline in demand also means that available oil resources will be sufficient to meet all future demand.
It cannot be denied that a sharp decline in oil demand and prices in the coming decades will have a profound effect on major oil producers such as members of the Organization of Petroleum Exporting Countries.
Middle East OPEC producers will continue to be major oil suppliers. The sharp decline in demand causes these key oil producers to lose blood in managing the market and keeping prices under control as they are today. Their price-setting abilities are weakened.
Natural gas, the least polluting fossil fuel, will also outperform oil as it replaces coal for electricity generation, especially in fast-growing Asian economies.
As oil prices fall, as a return scenario, gas will eventually let the oil to be in trade at a higher rate.
Gas demand in Asia will increase by an average of 1.5% per year by 2050, compensating for declines in more mature markets, which will enable the transition from gas to renewable energy.
