Reuters experts say that this year could mark a new turning point in the energy sector, marking the end of the oil era, due to the crisis caused by Covid-19.
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One of the main reasons why the role of oil continues to decline is the increase in the number of electric cars and the gradual transition to renewable energy sources. As a result, the oil industry is forced to revise its long-term forecasts for oil demand.
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“All major oil market players agree and understand that demand will never reach previous levels,” a source linked to the Organization of the Petroleum Producers (OPEC) told the agency.
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According to forecasts, oil consumption will still peak and will continue to decline thereafter. For example, in 2019, the world consumed 99.7 million barrels of oil per day. OPEC forecasts that this figure could reach 101 million barrels per day this year, but due to the crisis it has dropped to 91 million barrels per day.
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The forecast for 2030 has fallen from 118 to 108 million barrels per day.
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The share of oil in the global energy sector has declined significantly in recent decades: in 1994, oil accounted for 40% of the energy sector, up from 33% last year.
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Oil prices are still significantly lower than most oil-producing countries would need to be able to achieve a balanced budget.
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From August, OPEC + countries will gradually start increasing oil production, which was limited by the crisis at the beginning of the year.
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