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IEA forecast oil price to USD 88 per barrel in 2025, to USD 112 in 2040

Gasoil News - Published on Wed, 14 Nov 2018

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Sputnik reported that the International Energy Agency (IEA) has improved its forecast for oil price by 6 percent to USD 88 per barrel in 2025 and by 0.9 percent to USD 112 per barrel in 2040, according to IEA’s World Energy Outlook 2018 report. In September, the oil price surpassed $80 per barrel for the first time since 2014 in light of geopolitical events, the decrease in Venezuelan output, and decisions made by major oil exporters, which affected production prospects, according to the report. "In the wake of the fallout from the 2014 oil price crash, the continued expansion of tight oil production in the United States and the prospect of major structural changes in oil consumption underpinned a view that the oil price was set to stay lower for longer, perhaps forever. The reality has been different," the report read.

According to the report, taking into account current countries’ energy policies and their announced plans, oil price is projected to gradually increase from the average price of USD 52 per barrel in 2017 to USD 88 per barrel in 2025, USD 96 in 2030, USD 105 in 2035 and USD 112 in 2040.

Moreover, the IEA expects world oil demand to increase from 94.8 million barrels per day in 2017 to 106.3 million barrels per day in 2040.

The report said that "China and India are responsible for nearly half of the total increase in demand to 2040. The heavy lifting on supply is led initially by the United States, but later on the Organization of the Petroleum Exporting Countries (OPEC) steadily increases its share of total oil supply."

The agency expects that in the long term trucks, petrochemicals, aviation and cars will be among the largest drivers of world oil demand. The decrease in the number of new upstream oil and gas projects could result in a supply crunch and a further growth of prices, the International Energy Agency said.

The report said that "Today's flow of new upstream projects appears to be geared to the possibility of an imminent slowdown in fossil fuel demand, but in the New Policies Scenario this could well lead to a shortfall in supply and a further escalation in prices."

According to the IEA, the largest supply crunch could be expected in the oil sector, as the average level of approvals of new conventional crude oil projects over the last three years "is only half the amount necessary to balance the market out to 2025."

The World Bank Group said at the One Planet Summit in Paris in December that it would cease to finance upstream oil and gas projects after 2019 "to align its support to countries to meet their Paris goals."

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Posted By : Joykumar Irom on Wed, 14 Nov 2018
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