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Spencer Dale, chief economist for BP oil company, and Bassam Fattouh, director of the Oxford Institute for Energy Studies, compared several forecasts of oil demand - the International Energy Agency, OPEC, BP itself, and Wood Mac et al. - and concluded that sales of oil will begin to fall by 2040-2050. The researchers did not decide when exactly its consumption reaches the peak since too many factors influence this. However, the researchers stated that the world is no longer threatened by a shortage of oil, and moreover: not all oil that is in the bowels of the Earth will be produced in general. Some forecasts say that oil consumption will reach a peak after 2025, others believe that this will happen after 2040 and later, but what's important is that after the peak is passed, oil consumption will begin to decline dramatically and it will be impossible to stop this trend.
And then producers with low prime cost will start squeezing out oil producers with low profitability from the market. It will be better for those countries where there is an opportunity to increase production very quickly - for example, Saudi Arabia, where the cost price of oil is now below $ 10 per barrel. Those countries where this is not possible will have to adapt the economy to new realities and spend decades in order to cut production costs and increase it.
According to the forecast of the Oxford Institute for Energy Studies, banks will not subsidize development of new deposits because of a long period of return of capital. Moreover, it will be difficult to get a loan simply for those countries whose budget depends on oil, if they cannot reform the economy so that the cost price of oil from national producers is kept below the price for it.
One of the dangerous consequences of the fall in demand for oil is the collapse of the national currencies of oil countries, the study says, especially those where the rate is floating and not set by central banks.
source: oxfordenergy.org
And then producers with low prime cost will start squeezing out oil producers with low profitability from the market. It will be better for those countries where there is an opportunity to increase production very quickly - for example, Saudi Arabia, where the cost price of oil is now below $ 10 per barrel. Those countries where this is not possible will have to adapt the economy to new realities and spend decades in order to cut production costs and increase it.
According to the forecast of the Oxford Institute for Energy Studies, banks will not subsidize development of new deposits because of a long period of return of capital. Moreover, it will be difficult to get a loan simply for those countries whose budget depends on oil, if they cannot reform the economy so that the cost price of oil from national producers is kept below the price for it.
One of the dangerous consequences of the fall in demand for oil is the collapse of the national currencies of oil countries, the study says, especially those where the rate is floating and not set by central banks.
source: oxfordenergy.org
