BP Predicts Global Oil Demand Will Peak In 2025
British Oil & Gas giant BP Plc (NYSE:BP) has predicted that global oil demand will peak next year while wind and solar capacity will continue to grow rapidly. In its latest edition of its annual Energy Outlook, BP has published a study of the evolution of the global energy system to 2050. BP has modeled its predictions on two key scenarios: The Current Trajectory and Net Zero. The Current Trajectory scenario is based on climate policies and carbon reduction pledges already in place while the Net Zero scenario assumes the world sticks to the 2015 Paris climate agreement to cut carbon emissions by around 95% by 2050. BP has predicted that oil demand will peak by 2025 at around 102 million barrels per day (bpd) under both scenarios. However, the rate of decline thereafter will be determined primarily by the pace of falling oil use in road transport. In the Current Trajectory, BP sees oil consumption gradually declining over the second half of the outlook to around 75 million bpd in 2050. The drop is, however, much more pronounced in Net Zero, with demand falling to just 25 million-30 million bpd by 2050. Regarding general energy demand, in the Current Trajectory scenario, BP has predicted that primary energy demand will continue rising up to the mid-2030s before broadly plateauing amid continuing growth in energy consumption in emerging economies, excluding China, broadly offset by declines in developed economies and eventually in China. In this scenario, global energy demand will only be 5% higher than in 2022. In contrast, the Net Zero scenario sees energy demand peaking in the middle of the current decade before entering a terminal decline phase. In this scenario, BP sees energy demand around 25% lower in 2050 compared with 2022. BP’s dire predictions align with those by Bloomberg, which last year predicted that global demand for road fuel will peak in 2027 at 49 million barrels per day driven by rapid adoption of electric vehicles, ever-improving fuel efficiency and shared mobility.
India eyes energy deals with Rosneft and other Russian companies
India wants to strengthen its energy ties with Russia and could seek deals with Rosneft and other leading Russian oil firms as part of a broader push to boost bilateral trade, Foreign Secretary Vinay Mohan Kwatra said on Tuesday. Indian Prime Minister Narendra Modi and Russian President Vladimir Putin have set a target of increasing bilateral trade to $100 billion by 2030 from about $65 billion at present, Kwatra told a news conference after the two leaders met in Moscow. “The two leaders when they spoke of cooperation in the (energy) sector, they did focus on how exactly to strengthen that partnership,” Kwatra said. “(And) in the similar vein, how exactly India in particular through the government-to-government route could also build partnerships with Rosneft and other energy entities,” he added. India has emerged as the biggest buyer of Russian seaborne oil sold at a discount as Western entities shun purchases due to a raft of sanctions imposed on Russian over its February 2022 invasion of Ukraine. Russia is the top oil supplier to India, the world’s third biggest oil importer and consumer. After Putin and Modi’s meeting, the two countries in a joint statement outlined nine key areas of cooperation for the $100-billion trade target. India is keen to boost its exports to Russia to fix its trade balance, tilted in favour of Moscow. The two nations want the elimination of non-tariff trade barriers and will continue to work for a Free Trade Agreement between Russia-led Eurasian Economic Union and India, the joint statement said. Energy cooperation included areas such as nuclear energy, oil refining and petrochemicals, partnership in energy infrastructure, technologies and equipment. Russian entities including Roneft have a majority stake in private refiner Nayara Energy, while Indian companies hold stakes in Russian oil exploration and production projects in the far east. India’s ONGC Videsh is seeking a formal approval from the Russian authorities to retain its stake of 20% in the Sakhalin 1 oil project in Russia. Beyond energy, Kwatra said India is a key buyer of Russian fertilisers and want to “consolidate and build” its relations with Moscow for security of crop nutrients. Modi and Putin also agreed to develop a bilateral settlement system using national currencies, the statement said.
India’s clean air target at risk as gas plan caught in regulatory minefield
If India is serious about more than doubling the share of natural gas in the country’s energy mix by 2030, justifying the billions of dollars of investments being made by the state in a national gas grid, and charting a path towards less polluting fuels, then it needs to review recent actions that threaten to shackle the gas industry and impact energy security. New Delhi’s ambitious targets to clean its air by decarbonising its energy sector will be underpinned by its success in building its nascent natural gas segment — rarely has any large nation directly made the leap from coal to renewables. The road to net zero passes through the gas grids.
Untether the fuel nozzle: What India’s oil & gas sector needs from Modi 3.0
When Narendra Modi took the prime ministerial office for the first time in 2014, he set clear goals for the oil and gas sector. Strong policy support and close oversight helped boost fuel access in a decade Households’ access to cooking gas has since become nearly universal. Network of petrol pumps has expanded by about three-fourths, and cooking gas distributors by about 80%. Households’ access to cooking gas has since become nearly universal. Network of petrol pumps has expanded by about three-fourths, and cooking gas distributors by about 80%. While access to fuels has risen, consumer affordability is lower than a decade earlier due to a decline in subsidies, increase in taxes and higher margins of oil companies. In Delhi, petrol is a third more expensive than it was in June 2014. Diesel is 50% dearer. Most cooking gas consumers no longer receive subsidies and end up paying double the price they did in 2014. Despite the PM’s call in 2015 to cut oil and gas import dependence by a tenth by 2022, it has risen in a decade to 88% from 77% in oil, and to 46% from 29% in gas. Domestic production has dropped by about a fifth for crude oil and risen barely 3% for natural gas in a decade. Meanwhile, consumption of refined products has increased by about half and that of natural gas by about a third. Foreign investors have shown little interest in the Indian exploration sector despite policy reforms. Set in the first term of the government, the goal of increasing the share of natural gas in the energy mix to 15% by 2030 from 6% hasn’t gotten nearer. The share is below 7%. The plan to build a $44 bn refinery with Saudi Aramco hasn’t happened. And the jury is still out on the benefits of building a mega state oil company by getting ONGC to acquire HPCL. GoI’s determination to build a competitive fuel retail market suffered a setback in the early days of the Ukraine war as the goal of providing affordable fuels powered the instinct to keep a tight control on domestic prices. GoI has since shown little sign of loosening its grip. Failure to find a buyer for state refiner BPCL further diminished the chances of a larger role for the private sector. Now in its third term, the BJP-led NDA government should focus on the following: Curb demand Officials often interpret rising domestic oil demand as a recognition that the economy is being managed well. Expanding economies need energy, not necessarily oil whose heavy import makes our economy vulnerable to global market shocks and geopolitics. The country needs massive investments in electrified public transport, and big incentives for faster adoption of EVs. China’s roaring success – 38% of new cars sold were electric in 2023, up from a mere 5% in 2018 – shows how quickly consumers can shift to EVs. Cut exploration uncertainty Reform laws or licensing contracts to assure explorers that their return from a project will not be affected by future government action. This is essential to draw in investors scared by retrospective and windfall taxes. Reform gas sector Include natural gas in GST, unbundle carriage and content, and end marketing exclusivity of city gas distributors where it’s due. Rules for energy emergency Bring in practical rules to deal with special situations, such as the one witnessed in the early days of the Ukraine war when global supply became difficult and prices skyrocketed. End price control Wars are still raging, but the energy market has stabilised. A genuinely competitive market would serve people better than the ones dependent on the state. Stop vacillating on SPRs Allocate funds to help build new strategic petroleum reserves (SPRs) and to fill them up, as it’s important for managing short-term supply problems.