THE ABDULLAH BIN HAMAD AL-ATTIYAH INTERNATIONAL FOUNDATION
FOR ENERGY & SUSTAINABLE DEVELOPMENT

Oil Investments Declining Future

Oil Investments Declining Future

Doha, May 2021

 

Oil Investments Declining Future

 

Since 2020’s COVID-19 global lockdown, an unexpected massive demand destruction of oil and gas, growing emphasis on a full global economic reset of global economies, as shown in EU’s Green Deal, China’s Net-Zero by 2060 or the current Biden energy transition approach, the term Peak Oil has re-emerged in discussions again.

British oil and gas major BP, supported by others, even upped the ante by stating in 2020 in its well-known BP Energy Outlook 2020, that oil demand already has peaked. In one of its scenarios, BP’s "business-as-usual" scenario, the company expects oil demand to have peaked after steadily rising for decades. In an even more optimistic scenario, BP sees consumption leveling off over the next decade before slowly declining. This Peak Oil Demand storm however has been short-lived it seems.

Still, Peak Oil is back in the headlines, but still struggling with its interaction with global gas demand, which even BP sees increasing until 2050. Analysts have been taking the BP outcome as a major turning point in the discussion, as it supports global energy transition and climate change discussions.

The decades-long Hubbert Peak or Club of Rome discussions at last, according to some, have become a fact of reality. Shortly after, the turn however has turned dramatically. In direct reactions to BP’s Energy Outlook, the IEA (OECD’s energy watchdog in Paris) and OPEC published reports stating that Peak Oil Demand is not yet on the horizon. In its World Energy Outlook October 2020, OPEC stated that it estimates that global demand will hit 109.3 million bpd in 2040 before declining to 109.1 million bpd in 2045 and plateauing "over a relatively long period."

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