Experts consider long term outlook over $380 oil projection
Some optimistic experts insist that oil prices may jump to $380 per barrel given global energy development ahead of 2050.
While Nigeria, especially the Nigerian National Petroleum Corporation (NNPC) had earlier predicted that the price would peak at $200 given the lack of investment in the sector, Russia’s oil producer Lukoil in its long-term energy outlook said the price is on its way to $380 latest by 2050.
Group General Manager for National Petroleum Investment Management Services, Bala Wunti, had earlier noted that the effect of investment decisions being made now would be felt in about five years.
Recall that the Organisation of the Petroleum Exporting Countries (OPEC) had said that investments of $11.8 trillion would be required between now and 2045 in the upstream, midstream and downstream oil sectors, stressing however that the growing rate of the push from fossil fuel could create an energy crisis.
The International Energy Agency had earlier this year insisted that investments in new fossil fuel projects would need to stop immediately if the world is to limit global warming to 1.5 °C.
IEA in a report released had unveiled its roadmap for reaching the critical target of tackling climate change by achieving net-zero greenhouse gas emissions by mid-century. Among the climate milestones laid out by the Paris-based IEA are the demand to achieve zero emissions from electricity generation in rich countries by 2035, and the rest of the world by 2050.
The Russians pegged their oil output on rising inflation and carbon as the “Transformation” scenario of Russia’s second-largest producer insisted aggressive phase-out of oil and gas and the most efficient and rapid development of renewable energy and electric transport would send oil price to $380 per barrel.
“Inflation may reduce the accessibility of energy for consumers” the report noted.
In an evolutionary scenario according to the report, the group assumed that current international energy policy and national programme considering existing technological capabilities, and the Equilibrium scenario would create a balance between achieving climate goals and economic development.
Under this scenario oil price was expected at $197 per barrel, with inflation accounting for most of the higher price.
According to the report, in the worst case, oil prices would exceed $100 in 2050, hovering at $128 per barrel.
Like NNPC, the experts noted that underinvestment would create shortages despite increasing prices.
“It is obvious that the forecasts made at the beginning of the pandemic emphasizing that the world had already passed the peak of oil consumption in 2019, proved to be wrong. On the contrary, we risk to face a global energy shortage due to years of underinvestment in the industry because of price shocks and ambition to stop using fossil fuels as soon as possible,” Oilprice quoted Lukoil’s president, Vagit Alekperov.