Equinor, a Norwegian oil, and gas firm said Global oil demand could peak in the early 2020s if countries pull together to hit climate goals or keep growing until 2050 in a conflict-ridden world.
Expectations for when oil demand will peak could change the supply dynamics, as investors weigh up whether to back long-term projects or to reduce their risks by focusing on investments with more rapid returns, such as shale oil, it said.
“An oil market in potential decline increases the uncertainty the producers face, reduces their investment horizon, and increases the focus on short payback periods for investments,” Equinor said in its new energy outlook.
Equinor, formerly known as Statoil, changed its name on May 15 to reflect its strategy of becoming a “broad energy” company. It plans to increase investments in renewable energy to 15% to 20% of its total capex by 2030.
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Oil demand in 2050 varies between 59 million and 122 million barrels per day (MMbbl/d) in its three scenarios called Renewal, Reform and Rivalry, compared with 97.8 MMbbl/d in 2017.
The Renewal scenario is consistent with the goal of the Paris climate agreement to limit a rise in the world’s average surface temperatures to below 2 degrees Celsius above pre-industrial times.
The Reform scenario, based on a continuation of existing policy and technology trends, sees oil demand peaking at 111 MMbbl/d around 2030, and declining to 105 MMbbl/d in 2050.