Fuel report
Oil 2021
Analysis and forecast to 2026
Oil
Global oil demand rebounded in 2021 from its Covid-induced historic decline and while demand is set to keep increasing in the immediate years, its longer-term outlook is uncertain because of challenges from alternative fuels and changing behaviour of drivers and commuters.
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When it comes to individual products, demand for gasoline might never return to pre-pandemic levels as efficiency gains and the shift to electric vehicles balance out robust mobility growth in the developing world. Despite efforts to curb plastics use and encourage recycling, demand for plastics and petrochemicals is growing strongly. As for regional consumption trends, Asia continues to dominate growth. By contrast, in many advanced economies, where vehicle ownership and oil use per capita are already at much higher levels, demand is never expected to return to pre-crisis levels. Depending on the extent of government policy initiatives and the pace of consumer behaviour changes, global peak oil use could come anytime between the mid-2020s and the mid-2030s.
To meet the expected growing demand over the coming years, producers from the Middle East will lead the global oil supply increase, largely from existing wells that can jack up production at short notice at low cost. Higher-cost producers in other regions of the world have curtailed investments in recent years, spooked by recent bouts of tumbling commodity prices, hobbling their ability to respond quickly to rising demand. The Middle East’s expanding market share would mark a dramatic shift from recent years when the United States dominated growth. As for downstream, Covid-19 left the world with excess refinery capacity that recent closures have only just begun to correct.
To meet the expected growing demand over the coming years, producers from the Middle East will lead the global oil supply increase, largely from existing wells that can jack up production at short notice at low cost. Higher-cost producers in other regions of the world have curtailed investments in recent years, spooked by recent bouts of tumbling commodity prices, hobbling their ability to respond quickly to rising demand. The Middle East’s expanding market share would mark a dramatic shift from recent years when the United States dominated growth. As for downstream, Covid-19 left the world with excess refinery capacity that recent closures have only just begun to correct.
Last updated Jan 25, 2022
Key findings
Oil demand forecast, 2010-2026, pre-pandemic and in Oil 2021
OpenGlobal oil demand shifts lower after historic collapse
World oil markets have rebounded from the massive demand shock triggered by Covid-19 but still face a high degree of uncertainty that is testing the industry as never before. The forecast for global oil demand has shifted lower, and demand could peak earlier than previously thought if a rising focus by governments on clean energy turns into stronger policies, and behavioural changes induced by the pandemic become deeply rooted.
Global methane emissions from oil and gas operations in the Sustainable Development Scenario, 2000-2030
OpenMethane emissions from oil and gas remain high despite industry initiatives and government policies
Oil production is currently responsible for around 40% of methane emissions, with leaks across the natural gas value chain accounting for the remaining 60%. Upstream oil and gas operations lead to more than three-quarters of total emissions, with the downstream segment accounting for the remaining share.
The 5% drop in methane emissions in 2020 occurred mainly because of the fall in oil and gas production and emissions are likely to rebound in 2021. In the Net Zero Emissions by 2050 Scenario, methane emissions decline rapidly for the next ten years, falling to be lower 75% in 2030 than in 2020. This results mostly from rapid deployment of emissions reduction measures and technologies, which leads to the elimination of all technically avoidable methane emissions within this decade.
The 5% drop in methane emissions in 2020 occurred mainly because of the fall in oil and gas production and emissions are likely to rebound in 2021. In the Net Zero Emissions by 2050 Scenario, methane emissions decline rapidly for the next ten years, falling to be lower 75% in 2030 than in 2020. This results mostly from rapid deployment of emissions reduction measures and technologies, which leads to the elimination of all technically avoidable methane emissions within this decade.
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Created in 1979, the EOR TCP evaluates and disseminates the results of research and development of enhanced oil recovery (EOR). Its primary focus is on improving the economics of EOR, increasing the recovery of oil originally in place, and extending reservoir economic life. The activities of the EOR TCP mainly cover information exchange on independent research activities carried out by the participating countries, the results of which are disseminated through annual Executive Committee meetings, two-day workshops and one-day symposia.
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