The Outlook for Global Oil Demand in the Coming Decades

2024/06/23 | Economy, interview, top news

Strategic Council Online – Interview: Amid a report by the International Energy Agency that the global oil market will face a significant surplus at the end of this decade, Iran's former representative in OPEC said: The IEA report does not apply to all countries and regions, but only some countries, especially the Europeans.

In an interview with the website of the Strategic Council on Foreign Relations about the IEA report that the demand for crude oil will go down significantly at the end of this decade and the world is moving towards energy with less emissions, Mohammad Ali Khatibi said that fossil fuels are inherently exhaustible. It is a fact that oil and gas resources are running. Man should think about sustainable energy production, including solar, wind, nuclear energy, etc. Fossil energies are not renewable, but solar, thermal, wind, etc., energy exist in nature and are regularly renewed.

Regarding the time announced in the International Energy Agency report, he said this schedule is unlikely to be close to reality because one should ponder a little about the timing of this issue and the reduction in production and demand for crude oil. This prediction may be true to some extent for some Western countries because the International Energy Agency has become the spokesperson for Western countries; in the past years, we have seen that these countries are looking for replacements for renewable energies. Since the 60s, European countries have tried their best to replace energy. Still, this problem is not so serious in Asia, Africa, and Latin America, and this replacement is not followed at this speed and quality. Therefore, the issue of energy replacement is not the same and varies from region to region and in each economic and political bloc.

Referring to the forecasts that we have entered the second half of the life of fossil energies and it is normal for crude oil production to decrease, Khatibi noted: We see among crude oil exporters that they no longer have the desire to export at a high rate, and this is a fact. Production in the first half of an oil tank’s life can be justified, but in the second half of its life, it is not like this, and the production must be managed in time.

This expert on energy issues stated: We are also witnessing this strategic view in Iran. Under the 13th government, the approach towards renewable energy was significantly increased, and a significant part was considered for these energies, and the natural process dictates the same path. Still, this issue is urgent for Iran or the countries that produce and export oil. Well, it’s not like that. In some countries, including Europe, this approach and sensitivity towards replacing renewable energy with fossil energy is serious and prominent. Still, this is not the case in all regions of the world. At the same time, in the few countries willing to use renewable energy, the resources are limited.

The former representative of Iran in OPEC stated: Although both producers and consumers of fossil energy should tie their energy future to renewable energy, it is unlikely that at the end of this decade, the demand for crude oil will drop so much that the producers will be stuck with their product.

On the other hand, renewable energy must be affordable. If the cost of using it is high, governments should provide subsidies so that the consumer can substitute crude oil; otherwise, it will not be easy to proceed.

Khatibi said: Western countries have been leading the way in replacing non-renewable energies since a decade or two ago, and they have also acquired technologies, but they are not willing to provide them to others and sometimes offer them at exorbitant prices.

As for nuclear energy, we can see how strict Western countries are regarding the production of nuclear electricity by other countries outside their bloc and how they are not easily willing to provide this technology to others; if others want to take action in this regard, they throw obstacles in their way. Therefore, replacing renewable energies is not a simple matter!

He stated: On the other hand, due to the high cost of renewable energy supply technologies and the problems of localizing them in all fossil fuel consuming countries, until a few decades.

In a few decades, crude oil consumption will be common in the world, and the demand for it will be significant, so oil will still have buyers.

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