“In the history of energy, we have seen the age of coal and the age of oil, and now we are fast approaching the age of electricity,” he said in an interview with the group. Bloomberg IEA Executive Director Fatih Birol.
Barring major geopolitical conflicts, he said, the world will enter a period “where there will be significant downward pressure on prices.”
“The world is poised to enter a new energy market context in the second half of this decade as market fundamentals for oil and gas weaken,” said Birol.
bloomberg.com
That would mark a turnaround from the start of the decade, when rising energy prices following Russia’s invasion of Ukraine in 2022 led to a brutal wave of inflation. Prices have already shown signs of cooling, with crude oil revenues down 20% from this year’s highs to less than $75 a barrel despite conflict in the Middle East.
The group confirmed its view that demand for oil and gas will reach a plateau in this decade. However, oil supplies are rising due to new production in the US, Brazil, Canada and Guyana, and a “wave” of liquefied natural gas projects is looming.
A “significant addition” of about 270 billion cubic meters of new LNG capacity is planned by 2030, according to the report. Even some clean energy technologies, such as solar photovoltaics, will have a surplus.
“Everything is ready for a buyer’s market,” Birol said.
Oil and gas prices falling
Crude oil prices could continue to hover between $75 and $80 per barrel, but only if OPEC and its allies curb production, according to the report.
Saudi Arabia’s OPEC+ is already holding back reserve capacity of more than about 6 million barrels per day after a series of production cuts. According to IEA forecasts, by 2030 this level will reach 8 million barrels.
“The growth of electric vehicles, led by China, puts oil producers in an awkward position,” the report said.
The world achieved record levels of clean energy last year, including more than 560 gigawatts (GW) of renewable capacity, according to the IEA. About $2 trillion is expected to be invested in clean energy by 2024, nearly double the amount invested in fossil fuels.
“In the second half of this decade, the prospect of a more abundant supply – or even an excess – of oil and natural gas, depending on how geopolitical tensions develop, will lead us to a completely different energy world,” said Birol.
In a scenario based on current government policies, global oil demand would peak by 2030 at just under 102 million barrels per day, then decline to a 2023 level of 99 million barrels per day by 2035, roughly largely due to lower demand from the transport sector. as the use of electric vehicles increases.
The oversupply of LNG capacity is likely to create a highly competitive market, at least until it is cleared, with prices averaging $6.5-8 per million British thermal units (Btu) in key import sectors by 2035, the report said.
LNG prices in Asia, considered the international benchmark, are currently around $13 per mmBtu.
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2024-10-16 05:31:00
