Global oil demand has another decade to grow until peaking in 2030, Mubadala Investment Company, one of the largest state wealth funds of the United Arab Emirates (UAE), believes.
The coronavirus-inflicted disruption in global oil demand this year will continue into next year, Musabbeh Al Kaabi, chief executive of Petroleum and Resources at the UAE’s Mubadala Investment Company, said in an interview as part of the ADIPEC Energy Dialogue series on Monday.
However, the investment firm of OPEC’s third-largest producer currently sees another decade in which oil demand will continue to grow, after recovering from the pandemic.
“Predicting the oil market is very challenging. COVID-19 has created major disruption to demand and we expect to see the continuation of that disruption in 2021. But if you project the horizon to 2030, we will go back to an acceptable level of growth, potentially peaking in 2030,” Al Kaabi said.
Global oil demand has recovered from the lows in the second quarter to levels last seen in the 1990s, but it will continue to rise in the next 12 months, according to the manager.
While Big Oil faces major challenges with calls to contribute to the fight against climate change and pressure from investors over Environmental, Social, and Governance (ESG) investing, national oil companies – such as those in the Middle East – will have room to invest in the upstream sector, according to Al Kaabi.
Mubadala’s view of global oil demand radically differs from BP’s new assumptions in its BP Energy Outlook 2020, which says that global oil demand may have already peaked last year as oil consumption may never recover to the pre-pandemic levels.
U.S. oil and gas firm ConocoPhillips, however, believes that global oil demand will not only return to the pre-crisis levels of 100 million barrels per day, but it will also grow from there.
By Tsvetana Paraskova for Oilprice.com
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How could this be true when the global economy and civilization as we know and enjoy wouldn’t exist without oil and vice versa.
With the global economy destined to continue growing to feed almost 8 bn people on earth, there could neither be a post-oil era nor a peak oil demand throughout the 21st century and probably far beyond. Global oil demand will have to continue growing to enable the global economy to grow also and feed the world’s growing population.
The alternative is a return to pre-industrial age and the destruction of the world’s forests thus causing a disaster probably far bigger than the current climate change.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London