The International Energy Agency expects global oil consumption to peak no sooner than 2040, leaving its long-term forecasts for supply and demand unchanged despite the 2015 Paris Climate Change Agreement entering into force.
The IEA says unless more money is spent exploring for, and developing, new oil fields, then demand may outstrip supply in the early years of the next decade.
That could see oil prices surging again, says the IEA, which represents 29 energy-producing countries.
“We are entering a period of greater oil price volatility,” “If oil prices rise in the short term, then shale producers can react quite quickly to put more oil on the market, producing a seesaw movement. And if we continue to see subdued investments in new conventional oil projects, this could have profound consequences in the longer term.”
– said Fatih Birol, the IEA’s executive director in a release.
One of the scenarios mapped out in a long-term forecast by the Opec producers group last week predicted that demand might peak within 15 years if the Paris agreement were fully implemented and alternative fuels displaced petroleum in cars.Royal Dutch Shell, one of the world’s biggest producer companies, recently said that peak demand could come within five to 15 years. Meanwhile, Fitch, the credit rating agency, warned of a “resoundingly negative” threat to the oil industry if electric vehicles took off quickly.