Page 6 - EurOil Week 42

EurOil COMMENTARY EurOil

IEA dismisses near-term peak in oil

demand, sees firm outlook for gas

The outlook for gas is stronger but the rate of growth will depend greatly on policy

GLOBAL THE International Energy Agency (IEA) has return to pre-pandemic levels and that by 2040, its
warned of the unprecedented difficulty in fore- share of the energy mix will shrink to under 20%
KEY TAKEAWAYS: casting the future of energy in its latest outlook for the first time since the industrial revolution.
• Oil demand will recover report, after what it described as the biggest dis- Solar power, on the other hand, will become the
to pre-pandemic ruption to demand since the World Wars and “new king of the world’s electricity markets,” the
levels by 2023 or 2027, the Great Depression. This uncertainty largely IEA said, thanks to its competitive costs. Overall
depending on the pace centres around how quickly the global economy renewables will overtake coal in usage by 2025.
of the global economic will recover from the coronavirus (COVID-19) As in previous outlooks, the IEA has set
recovery. pandemic, but also shifting policies as countries out its forecasts in a Stated Policies Scenario
• Without a significant look to bring down their emissions. The Par- (STEPS), which reflects today’s announced
shift in policies, it is is-based agency has nevertheless drawn several policy intentions and targets, and a Sustainable
too early to foresee key conclusions. Development Scenario (SDS), which assumes a
a rapid decline in oil In its 2020 World Energy Outlook, published surge in clean energy policies and investments
consumption. last week, the agency forecasted that oil demand that puts the world on track to meet the goals
• Gas consumption was would regain its pre-pandemic level sometime of the Paris Agreement. But this year the agency
less affected by the in the 2020s, with the exact timing depend- has also included a Delayed Recovery Sce-
crisis and will therefore ing greatly on the pace of the post-COVID-19 nario (DRS). This is based on the same policy
recover sooner. recovery. The IEA has long resisted predictions assumptions as in STEPS, but projects a much
• Gas will retain its that peak oil demand is imminent, and its latest slower recovery from the pandemic, with the
current share in the outlook is no exception, forecasting that con- global economy only returning to its pre-crisis
global energy mix even sumption would remain flat or see modest gains size in 2023. In addition, the IEA has published
if most countries align during the 2030s. a Net Zero Emissions by 2050 case, which sets
their policies fully with Gas consumption, which has fared better out what the world would need to do by 2030 to
the Paris Agreement. than oil and coal during the pandemic, will reach net-zero emissions in three decades’ time.
• Some $70bn in return to pre-crisis levels much sooner. Demand
gas infrastructure will continue to grow over the coming decades, Oil
investment will be as the fuel retains its role as the main provider of Global energy demand is set to fall by 5% in
needed each year to stable power supply. 2020, the IEA predicts. Oil takes the hardest hit
support growth in Asian Meanwhile, the IEA called time on coal, pre- out of the main fuels, with demand contracting
demand. dicting that consumption would be unlikely to by 8%.

P6 www. NEWSBASE .com Week 42 22•October•2020