Oil to hit $40 by 2030 if climate goals are met: consultancy
Global oil prices could drop to around $40 a barrel by 2030 if governments push to reduce fuel consumption in step with U.N.-backed plans to limit global warming, a leading energy consultancy said on Thursday.
In a report outlining a scenario where the world acts decisively to tackle greenhouse gas emissions by electrifying transport and industry, Edinburgh-based Wood Mackenzie said oil consumption would begin a steep drop as early as in 2023.
The decline in demand would accelerate to a rate of 2 million barrels of oil per day (bpd) to reach 35 million bpd by 2050, accounting for a 60% drop in carbon emissions from oil use from today’s levels.
Oil consumption hit a record of around 100 million bpd in 2019 and is expected to recover strongly this year after cratering last year due to the coronavirus epidemic.
As a result, oil prices would begin to slip later this decade, WoodMac said in its report. Under its Accelerated Energy Transition scenario, it expects Brent crude prices to average $40 per barrel by 2030, compared with current prices of around $65 a barrel.
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