Stability today begets stability tomorrow. It is vital that global oil market stakeholders seek sustainable stability – for producers, in terms of security of demand, and for consumers, in terms of security of supply; for investments and capacity expansion to flourish; and for economies around the world to grow. Sustainable stability will help provide access to modern energy services for those currently without.
These elements have been a central focus of the historic ‘Declaration of Cooperation’ among the 25 members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers. Over the past 20 months or so, this cooperation has helped return more balance to the oil market and more optimism to the industry, and has had a positive impact on the global economy and trade worldwide.
However, we appreciate that our work never stops. All countries that agreed to the declaration are fully committed to sustaining balance and stability in the market, in the interests of both producers and consumers. We continue to explore ways to further institutionalise this long-term all-inclusive framework, to look at some of the industry’s pertinent challenges, as well as the opportunities.
The importance of stability is underscored in OPEC’s recently released World Oil Outlook 2018. The publication paints a comprehensive picture of the path that lies ahead for the global oil market, as well as exploring the possibilities for the overall energy mix.
What is clear is that all energies will be needed in the decades to come. It is not about choosing one fuel over another, given that global energy demand is set to increase by a robust 33% by 2040, driven predominantly by developing countries, which see almost 95% of the overall growth.
In the energy mix
There is no doubt that renewables will significantly expand their role, but by 2040 oil and gas combined are still expected to provide more than 50% of the energy mix. The report forecasts that oil will remain the fuel with the largest share of the overall energy mix in the period up to 2040.
In fact, long-term oil demand has been revised upward for the second successive year, with total demand now projected to reach close to 112 million barrels a day by 2040. It is also important to add that the report sees no expectation for peak oil demand over the forecast period.
In light of this expanded demand for oil and energy overall, it is also important to recall how oil and gas have transformed the economies and societies of the industrialised world. Oil and gas have provided heat, light and mobility, and created and sustained economic growth and prosperity.
However, this has not been the story for everyone. Today, around three billion people still lack access to clean fuels and efficient technologies for cooking, while almost one billion remain without access to electricity. It is vital that this is addressed. These are people who need their voices heard. They need access to reliable, safe and secure modern energy services at scale.
Of course, we also recognise the importance of the environmental challenge. In this regard, OPEC remains fully engaged and supportive of the Paris Agreement based on the core principle of common but differentiated responsibilities in a fair and equitable manner.
The World Oil Outlook 2018 shows that OPEC is fully aware of the dual challenge of meeting growing energy demand, while constantly improving the environmental footprint of all the energies we use.
We need to continually look to develop, evolve and adopt all types of cleaner energy technologies. In additon, we need inclusive and non-discriminatory energy policies that will enable us to meet the expected future energy demand in a sustainable manner.
Meetings such as the G20 Buenos Aires Summit must focus on the critical issues of energy access, expanding energy demand and the need to ensure a level playing field for all energies and technologies.
Given the ever more complex nature of our industry, the best platform to tackle these challenges is a stable market environment, with extensive engagement, dialogue and cooperation at the fore. All stakeholders need to find common ground and to look for shared, realistic and effective solutions, to help deliver the outcome we all desire: ensuring sustainable energy for all.