Global oil demand will peak at around 2040 or “much sooner”, the IMF (International Monetary Fund) said in a new report on the future of oil.
According to the document, this could have a significant impact on oil exporting nations. The Middle East will be especially affected since its existing wealth could be depleted over the next 15 years without major reforms.
Falling oil demand
“Growth of global oil demand will significantly decelerate, and its level could peak in the next two decades”; the IMF said in its report entitled “The Future of oil and fiscal sustainability in the GCC Region.”
The report added that analysis of previous market developments revealed “a strong and sustained declining trend in the global oil demand, after accounting for income and population growth.”
This reflected a range of factors, the IMF said. FOr instance, long-term improvement in energy efficiency and substitution away from oil. These trends that had so far been “veiled by the effects of economic and population expansion.”
— IMF (@IMFNews) February 6, 2020
The decline will become more visible
“But it is poised to become more visible in the coming years, resulting in a path of gradually slowing—and eventually declining—global demand for oil. The latter would peak by around 2040 in our benchmark projection or much sooner in scenarios of stronger regulatory push for environmental protection and faster improvements in energy efficiency.”
Growth of global demand for natural gas is also expected to slow, the Fund said; “although it is expected to remain positive in the coming decades.”
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