China fueling demand | 331 (January 2017)

LUKOIL recently presented its global oil market prognosis through 2030 in Moscow.

2017-04-13 19:43 Views 364

China fueling demand

LUKOIL recently presented its global oil market prognosis through 2030 in Moscow.

The two major factors driving global demand for oil in the coming decades will be population growth and urbanization, according to LUKOIL VP Leonid Fedun. By 2030 there will be 340 million passenger cars on China's roads, significantly more than in the United States (200 million).

Globally the number of cars will increase by around a billion to 3 billion by 2030. Even by the most optimistic scenarios, the share of electric cars will not exceed 10% of that total.

According to LUKOIL's estimates, global daily oil demand will increase from 95 million barrels in 2015 to 108 million in 2030. However production at existing oilfields will drop from 97 million to 70 million barrels daily over the same time period. This means that without new oilfields coming online, the global divide between oil supply and demand will be 40 million barrels by 2030.

This rift will partially be covered by new hydrocarbon projects in the Middle East, especially within the borders of OPEC members. Iraq and Iran will be rapidly developing new production. By 2030 their portion of oil production within OPEC is expected to increase from 24% to 32%.

The second potential source of production growth are shale oil deposits in the US. However the development of this industry is directly dependent on global oil prices.

According to LUKOIL, an oil price of $80 per barrel is optimal for a balance between supply and demand on the market in the medium term. At the same time, wild price fluctuations have a major negative effect on the development of the global oil industry because they lead to a deficit of raw materials.