Meanwhile, the 240 million people living in India without access to electricity will drive the largest surge in global energy demand, overtaking China as the world’s largest user of coal and boosting oil demand to 10 million barrels a day – roughly equivalent to China’s daily demand now.
Advertisement
“It would be a grave mistake to index our attention to energy security to changes in the oil price”, said IEA Executive Director Fatih Birol.
The country has pretty much said that it doesn’t care about how low oil is ravaging the markets – its current policy seem to be to pump so much oil that prices stay too low for competitors to make a profit – leading to massive losses at big oil companies, suppressed inflation globally, and even a downgrade for Saudi Arabia’s own sovereign debt.
In its World Energy Outlook, the IEA said it anticipates demand growth under its central scenario will rise annually by a few 900,000 barrels per day to 2020, gradually reaching demand of 103.5 million bpd by 2040.
Oil producers that aren’t members of the group are complaining as well: On Monday, Omani oil minister Mohammed Bin Hamad Al Rumhy called current oil production levels “irresponsible” and said the group had contributed to low oil prices.
Gas use could also be curbed if delayed investments amid lower commodity prices tightens the markets in the 2020s, the report said.
Iran and Iraq will lead an expansion of OPEC’s production in the years ahead as growth stalls in non-OPEC countries.
Its net oil imports are forecast to exceed those of the European Union, while China’s net oil imports will be about five times those of the United States by 2040, it said.
Investment in new oil supply has been slashed by more than 20% this year, the IEA estimates, as crude prices slumped following OPEC’s decision to defend its market share rather than support prices.
Low near-term global economic growth and a lasting switch by OPEC to a policy of pumping oil at record rates to increase its market share and more resilient non-OPEC supply could conspire to keep the oil price lower for longer.
Reliance on Middle East oil exports could eventually escalate to levels last seen in the 1970s, the Paris-based IEA said in its World Energy Outlook.
Advertisement
Plus, the world’s increased dependence on cheap oil could crowd out $800 billion in possible energy efficiency improvements in automobiles and aircraft by 2040, eliminating 15 percent of the efficiencies the IEA otherwise expects to see.
