Oil

Oil markets are going through a period of extraordinary change as the United States is increasingly leading the expansion of global oil supplies, and demand is shifting from developed economies and transportation fuels to Asia and petrochemicals.

Oil Jpg

Key findings

Change in monthly oil demand in selected countries, 2020 relative to 2019

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Global oil demand fell by a record amount in early 2020

Global oil demand is expected to be a record 9.3 mb/d lower in 2020 than in 2019, mostly because containment measures in 187 countries brought global mobility to a halt. The recovery in the second half of 2020 is projected to be gradual, as economies come out of containment and activity levels rise, but demand is not expected to reach pre-crisis levels before the end of the year.

Oil demand by region and scenario, 2018-2040

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The outlook for oil demand varies dramatically depending on scenario

Under the Stated Policies Scenario, oil use in passenger cars peaks in the late 2020s and during the 2030s demand increases by only 0.1 mb/d on average each year. However there is no definitive peak in oil use overall, as there are continued increases in petrochemicals, trucks and the shipping and aviation sectors. In contrast, in the Sustainable Development Scenario, determined policy interventions lead to a peak in global oil demand within the next few years. Demand falls by more than 50% in advanced economies between 2018 and 2040 and by 10% in developing economies.

Global methane emissions from oil and gas operations in the Sustainable Development Scenario, 2000-2030

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Methane emissions from oil and gas remain high despite industry initiatives and government policies

Methane emissions are the second-largest cause of global warming today. Methane emissions come from a range of anthropogenic and natural sources; within the energy sector, from oil, natural gas, coal and bioenergy. The IEA estimates that the oil and gas sector emitted 82 Mt (around 2.5 GtCO2-eq) in 2019. While methane tends to receive less attention than CO2, reducing methane emissions will be critical to avoid the worst effects of climate change. Emissions remain high despite initial industry-led initiatives, government policies and regulations, as implementing abatement options quickly and at scale remains a challenge. Policies will be critical to achieve the 75% emissions reduction by 2030 demonstrated in the SDS, but further innovation and support are needed to better understand emissions levels, make leak detection and repair more consistent, and reduce the overall cost of emissions mitigation programmes.

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