The IEA, in its flagship World Energy Outlook (WEO) for 2018, released 13 November, repeats what has become a familiar warning. A sharp reduction in upstream investment since the 2015 oil price downturn risks turning into a shortfall of crude by the early-to-mid 2020s. This message presents a sharp juxtaposition with the near-term forecasts of both the IEA and Opec which project large global oil surpluses through end-2019 (MEES, 16 November), at least barring further sharp reductions in Iranian exports (MEES, 16 November).

The WEO forecasts global annual oil demand growth of 1mn b/d out to 2025. Oil demand continues to grow, albeit at a slower rate, out to the end of the IEA’s forecast period in 2040. Though the growth in renewables means use of oil in the power sector will fall by 2.5mn b/d versus 2017 levels, and use in cars will remain more or less level (with falling consumption in developed countries cancelled out by growth elsewhere), oil demand for petrochemicals will continue to grow strongly, the IEA projects. Petrochemicals alone are expected to account for almost 5mn b/d of overall 11.5mn b/d growth to 2040 (from 94.8mn b/d in 2017 to 106.6mn b/d by 2040 under the New Policies Scenario) – MEES, 16 November. (CONTINUED - 929 WORDS)