Oil to rule the roost even in 2040

It seems, the world will be reliant on oil; at least for a few more decades.

World oil demand is expected to grow by almost 50 per cent by 2040, OPEC says.

OPEC in its World oil outlook said that more than $10 trillion investment is required between now and 2040 and the inability to maintain this will affect the delicate balance between prices, the cost of the marginal barrel and future supplies.

‘In the years ahead, global energy demand is set to grow by 47pc, reaching 399 million barrels of oil equivalent per day by 2040. Much of this growth will continue to be concentrated in the developing world as industrialization, population growth and the unprecedented expansion of the middle class will propel the need for energy, ’the report notes.

Even though the renewable energy based on solar, electric and wind will be witnessing strong growth, their combined share in the energy pie will be only 4.3pc in 2040, whereas oil and gas will contribute 53pc of the global energy mix, OPEC said.

The report says that the oil price will be above $80 per barrel by 2020.

OPEC played down the threat of electric cars and similar alternative fuel vehicles. It says ‘By 2040, only 6pc of the passenger car stock and 5.3pc of commercial vehicles will be running on non-oil fuels. Without a technology breakthrough, battery electric vehicles are not expected to gain significant market share in the foreseeable future.’

OPEC Secretary General Abdalla Salem El Badri, in his foreword to the report highlighted the dichotomy of energy poverty, billions of people still relying on biomass as an energy source and billions not having access to electricity, and the recent discussions revolving around reducing emissions. “For them, it is not about reducing emissions or using energy more efficiently. Oil can play a role in helping alleviate energy poverty, through sustainable and supportive policies and investments,” he said.