The global oil market is on the brink of a significant upsurge in prices, anticipated to commence by the middle of the next decade due to sustained demand growth in markets like China, reports consultants Rapidan Energy Group. The advisory firm predicts that with the receding expectations of peaking global demand by 2030, the reality of a structurally short supply will become evident.

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As spare capacity is projected to diminish drastically by 2035, oil prices could potentially enter a boom cycle. Interestingly, despite various scenarios evaluating the escalation of electric vehicles, world oil consumption is expected to grow continuously until 2050. Specifically, gasoline demand will persist through to 2035, with no apparent decline even in China, a primary driver of electric vehicle adoption.

Data from the IndexBox platform highlights the significant role China plays as the top oil import country, with values reaching USD 337.3 billion in 2023. Other leading import nations include the United States (USD 165.2 billion), India (USD 140.4 billion), South Korea (USD 86.5 billion), and Japan (USD 80.9 billion).

The oil market dynamics are further complicated by varying forecasts from major entities like the Vitol Group and the International Energy Agency, which foresee a stagnation in demand growth this decade due to a global pivot toward renewable energy sources. Rapidan’s report indicates short-term price reductions, possibly dropping to USD 55 a barrel owing to strong production from non-OPEC countries such as the U.S., Brazil, and Guyana. This situation might compel OPEC+ to either relinquish more market share or endure lower prices to force competitors out of the market, positioning the alliance in a difficult strategic dilemma.

Source: IndexBox Market Intelligence Platform