World’s Top Oil Trader Sees Oil Demand Peak After 2030
A slower pace of the energy transition will push peak oil demand beyond 2030, according to the world’s biggest independent oil trader, Vitol Group. “Oil demand has a good few number of years still to climb … before it plateaus,” Vitol’s chief executive Russell Hardy said at the International Energy Week in London, as carried by Reuters. Overall global demand for oil, natural gas, and coal is also set to peak later than expected as the energy transition is progressing slower than initially thought, according to the executive. Vitol’s view on peak oil demand is several years later than the International Energy Agency (IEA), which advocates for a faster energy transition and has insisted for half a year now that global oil demand will peak before 2030. According to the Paris-based agency, demand for all fossil fuels – oil, natural gas, and coal is set to peak before 2030, undermining the case for increasing investment in fossil fuels. Vitol, however, says that the energy markets have changed in recent months and peak oil wouldn’t occur this decade. “We agreed with that view 12-24 months ago, but we are of the view now that the pace of change is more challenging so it is likely to drift into the early 2030s,” Vitol’s Hardy said at this week’s conference, as carried by City A.M. The pace of change has been challenged by higher interest rates, supply-chain woes, and low returns for renewable project developers, and a public backlash against some governments imposing more expensive choices to consumers for their energy supply. The energy transition is happening, but it will not happen as fast as environmental zealots would have liked. Therefore, oil and gas consumption will continue to grow, even if the pace of growth may have peaked. Most analysts and banks expect peak oil demand in the early 2030s, as Vitol does now. The IEA’s “beginning of the end for fossil fuels” this decade is not shared by many. OPEC, which has a vested interest in continued oil demand growth for decades, sees robust demand even in the long term. The cartel last year raised significantly its long-term estimate in its latest annual World Oil Outlook, with global oil demand seen at around 116 million barrels per day (bpd) in 2045, up by 6 million bpd compared to the previous assessment from 2022. OPEC expects global oil demand to increase by more than 16 million bpd between 2022 and 2045, rising from 99.6 million bpd in 2022 to 116 million bpd in 2045. Even as China’s demand growth slows, India will emerge as the top driver of global oil consumption growth, according to OPEC and many other forecasters, analysts, and investment banks. India’s strong economic growth in the medium term would raise oil demand, as will continued urbanization and industrialization, analysts say. OPEC said in its latest annual outlook that India would be the driver of oil demand growth through 2045, expecting to add 6.6 million bpd to oil demand by then. With India driving oil demand growth and policymakers recalibrating their approach to energy transition pathways, peak oil demand is unlikely to happen this decade, OPEC Secretary General Haitham Al Ghais wrote in an article published on OPEC’s website last month. “Today, what is clear is that peak oil demand is not showing up in any reliable and robust short- and medium-term forecasts,” Al Ghais said. Peak oil demand will not happen by 2030, OPEC’s Al Ghais wrote, due to policymakers re-evaluating their approach to energy transition pathways and pushback from consumers. Faster industrialization in developing countries and the emergence of a larger middle class there, an expansion in transport services, and greater energy demand and access are also factors preventing peak oil demand this decade, according to OPEC’s secretary general. “After all, crude oil and its derivatives are a constant presence in our daily lives, bringing vital everyday products, and helping to deliver on energy security and energy access in a widely available and affordable way,” Al Ghais wrote. “Time and again, oil has defied expectations regarding peaks. Logic and history suggest that it will continue to do so.”
Mahanagar Gas acquires 30.97% share in three-wheeler EV company 3ev Industries
Mahanagar Gas said on Tuesday that it has entered into a shareholders’ agreement with 3EV Industries Private Limited to acquire 30.97 percent shareholding in the company that manufactures and operates three-wheeler electric vehicles (EVs). “… we wish to inform that subsequent to execution of Share Subscription Agreement (“SSA”), Mahanagar Gas Limited (“Company”) has entered into Shareholders’ Agreement (“SHA”) with 3EV Industries Private Limited (“3ev”), Founders, Promoters and other Shareholders of 3ev, to acquire 30.97% shareholding in 3ev,” Mahanagar Gas told the stock exchanges in a regulatory filing “The Agreement has been entered for acquiring 30.97 percent shareholding and voting rights in 3ev through equity instruments, subject to the fulfilment of terms and conditions under the definitive agreements entered/ to be entered into by the Company in connection with the above-mentioned transaction,” said Mahanagar Gas. The shareholding will give MGL the right to appoint one Director on the board of 3ev and one board observer. MGL will have the right to subscribe 30.97 percent of share capital of 3ev and will subscribe shares on pro-rata basis for every further issue of shares.
India Could Become a Key Player in the $500-Billion Green Hydrogen Market
India could become a key market player in the global green hydrogen industry, which is set to create $500 billion in economic opportunities, consulting firm Alvarez & Marsal said in a new report this week. India could be at the forefront of green hydrogen development, thanks to its competitiveness in producing clean energy — abundant renewable energy resources, manufacturing competitiveness, and low cost of capital, according to the consultancy. Countries rich in renewable energy resources like solar and wind are well-placed to take advantage of the green hydrogen opportunity, says Alvarez & Marsal. These countries include India, Egypt, Chile, Argentina, Saudi Arabia, the United Arab Emirates (UAE), the Chinese mainland, Australia, and the United States. “The UAE, India, and Saudi Arabia seem well placed in global green hydrogen competitiveness and therefore could partake a significant share of global trade,” Alvarez & Marsal analysts wrote in the report. On the other hand, the EU, Japan, and South Korea could be the early adopters of hydrogen on the demand side with imports around 2030, according to the consultancy. While heavy industry and governments pin their hopes on hydrogen for faster decarbonization, and power-generating companies and oil and gas majors look to diversify into low-carbon hydrogen production, costs are still high for green hydrogen production and hold back massive deployment of projects, analysts say. Forecasters, including the International Energy Agency (IEA)—a staunch supporter of all things green – acknowledge that costs need to be slashed significantly if clean hydrogen is to play a major role in the energy transition. Green hydrogen—currently costing 3 euros to 8 euros per kg in some regions—is more expensive than ‘grey’ hydrogen, produced from natural gas, PwC said in an analysis last year. “Low-emission hydrogen production can grow massively by 2030 but cost challenges are hampering deployment,” the IEA said in its Global Hydrogen Review 2023 report in September 2023.
India looks elsewhere for oil as US sanctions crimp Russia trade
Tightening enforcement of US sanctions is denting India’s oil trade with Russia, forcing processors to consider other supplies, according to refinery executives familiar with the matter. Russia is still the dominant supplier to India, but there are signs refiners are buying more from elsewhere. Overall imports from Saudi Arabia are 22% higher this month than January, with the biggest private refiner — Reliance Industries Ltd. — taking its highest volume since May 2020, according to Kpler. India’s refiners are keen to take more Russian oil, but there would need to be US approval for buying to ramp up again, the executives said, asking not to be identified because the information is private. Russian oil is now only $2-$4 a barrel cheaper than other supplies and double-digit discounts are unlikely to return due to competition for barrels from China, the executives said. The discount blew out to more than $30 after the war. India’s imports of Russian oil surged after the war as refiners took advantage of cheaper barrels that other buyers shunned. At its peak last year, crude from the OPEC+ producer accounted for almost half of the nation’s purchases, but fresh US sanctions has recently stranded some cargoes. Moscow is also seeking payment in yuan due to increased scrutiny by some banks over using dirhams to settle the trade in the past few months, said a refinery executive and a government official.