The Organisation of Petroleum Exporting Countries (OPEC) in a recent report has projected that a barrel of oil will cost around $70 by 2020 and gradually move up to $95 by 2040.
‘An assumed gradual price recovery in the coming years will also lead to higher production’, OPEC said. Brent crude, the global benchmark, is currently trading at around $38 a barrel.
The most recent World Oil Outlook (WOO) provides the cartel’s outlook on supply, demand and prices through 2020 and 2040.
While OPEC projected that the demand for its oil will increase more than previously forecast over the next five years, it added that the figure will still remain below current production levels.
According to OPEC’s latest report, shale oil production will only start to ‘plateau’ at 5.6mn barrels per day by 2025 and then decline.
‘Elsewhere in the energy mix, other renewables (mainly, wind, solar and geothermal) are expected to continue to grow at 7.6% per annum’, the WOO predicts.
The organisation predicts cars and trucks will consume about 17% more oil in 2040 compared to today, as fuel demand from new customers in China and India shoots up.
Sitting atop the world’s fourth-largest oil reserve, Iran’s return to the global marketplace will undoubtedly mark a return of Iranian oil, as well. ‘However, its relative weight will decline in the next decades’, OPEC says.
The organisation further stated that it expected its current market share to increase by four points to 37% by 2040.
