Ever since the days of former chief executive John Browne, BP has had a talent for making headlines and leading the industry, if not always in the right direction. Its latest energy outlook, the first major long-term view that takes coronavirus into account, shows the potential for an imminent peak in oil demand.
Rather than some abstract exercise, such a near-term peak has big implications for the choices of companies and of Opec.
BP presents three scenarios for global energy and climate: one assuming “business as usual” gradual evolution of policies, and two consistent with the Paris Agreement targets of limiting global warming to 1.5-2 degrees Celsius. In every one though, 2019 appears the all-time peak of oil demand.
Even with business-as-usual, demand recovers only slightly to 2025 before falling gradually. In the other two cases, oil demand drops precipitously to 30-50 million bpd by 2050. That may seem a long way off, but is well within the active life of oil-fields developed today, and even more so of Opec’s remaining reserves.
The scenarios are given more credibility by being in line with BP’s own new corporate strategy. This sees its oil and gas output falling about 40 per cent by 2030, not entering any new countries for hydrocarbon exploration, while building up its portfolio of solar, wind and electric vehicle charging stations.
Despite claims by some media, BP is not the first major oil company to predict an imminent peak in oil demand. Statoil (now Equinor) has for some years had scenarios that peaked between 2025-30. Even BP last year provided a scenario with a peak around 2024. It is only natural that the severe demand destruction of Covid-19 would bring that date forward.
Moreover, all the major European oil firms have targets for net zero carbon emissions by 2050; BP’s is not the most aggressive.
Such scenarios depend on the post-Covid change in habits such as more home working, and the dismal effect of climate change in damaging economies in Africa and Latin America.
Non-oil technologies may be boosted by a rapid environmental conversion by the governments of leading countries, and the removal of policy barriers. Apart from renewables and electric cars, now quite mainstream, sectors such as plastics, shipping and aviation will have to find and deploy non-oil alternatives quickly.
European petroleum demand is certainly under strong pressure. The European Green Deal, part of post-pandemic recovery, will strongly emphasise electric vehicles. Refining and margins in shrinking markets, such as Europe and Japan now, would also fall. In 1967, there were 40 000 petrol stations in the UK; today, there are about 8000 for a car fleet three times larger. Charging points at home and work could eliminate many remaining forecourts.
The US’s near-term path depends on the results of November’s election. But in the longer term, public opinion in the more economically dynamic parts of the country, and the requirements of sustainability-minded investors, will drive companies to turn to zero-carbon options.
The big question mark is in developing Asian economies. India, China, Indonesia and others have not weaned themselves off coal, which is dirty but cheap and secure. Even the growing competitiveness of renewables has not yet made much impact on the portfolio of planned new coal power stations, despite analyses showing solar and wind would be cheaper.
This story may well be repeated for familiar and convenient oil-fuelled vehicles. Outside China, where the government has strongly backed them, electric vehicles will need to be clearly superior in cost and performance, and appeal to consumer tastes.
Since the global financial crisis, oil demand has grown on average almost 1.4 million barrels per day each year, ranging from 0.8-1 million bpd when oil prices were high to 1.8 million bpd when they had just fallen sharply (in 2015-16). Opec sees demand at about 90.2 million bpd this year and 96.9 million bpd next year, recovering to 2019 levels by 2022.
This depends, of course, on a rapid easing of the Covid-19 pandemic and the associated economic fallout. After the 2008-9 global financial crisis, in retrospect a less severe shock, demand rose 3 million bpd in 2010. A resumption of the last decade’s average growth from 2022 onwards would get us past the 2019 level by about 2024. So even BP’s business-as-usual scenario requires a sharp break with past trends.
For oil companies and oil-exporting countries, the exact timing of the peak may have attracted much debate. But it is less important than the level of demand at peak, the speed of the decline afterwards, and the price path. It would be easier to adjust to a long, bumpy plateau of demand than a rapid decline.
Prices will probably be lower on average as demand drops. But there will still be cycles of underinvestment and inadequate capacity when the market tightens.
Geopolitical events, perhaps the failure of the industry in collapsing states such as Venezuela and Libya today, could also interrupt supply. Investment in some non-Opec producers may be constrained by a loss of investor appetite along with growing government restrictions.
Because of these factors, BP sees Opec gaining market share. But its overall production is set to drop in the decade to 2030, then rise only gradually to 2050 even in the business-as-usual case.
National oil companies and ministries, who have planned for major production increases and for vast new refineries to meet Asian appetites, will hope that BP is mistaken.
Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Premier League results
Saturday
Tottenham Hotspur 1 Arsenal 1
Bournemouth 0 Manchester City 1
Brighton & Hove Albion 1 Huddersfield Town 0
Burnley 1 Crystal Palace 3
Manchester United 3 Southampton 2
Wolverhampton Wanderers 2 Cardiff City 0
West Ham United 2 Newcastle United 0
Sunday
Watford 2 Leicester City 1
Fulham 1 Chelsea 2
Everton 0 Liverpool 0
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
RESULTS
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UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
UAE currency: the story behind the money in your pockets
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
UAE currency: the story behind the money in your pockets
How to report a beggar
Abu Dhabi – Call 999 or 8002626 (Aman Service)
Dubai – Call 800243
Sharjah – Call 065632222
Ras Al Khaimah - Call 072053372
Ajman – Call 067401616
Umm Al Quwain – Call 999
Fujairah - Call 092051100 or 092224411
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
UAE v Zimbabwe A
Results
Match 1 – UAE won by 4 wickets
Match 2 – UAE won by 5 wickets
Match 3 – UAE won by 25 runs
Match 4 – UAE won by 77 runs
Fixture
Match 5, Saturday, 9.30am start, ICC Academy, Dubai
COMPANY%20PROFILE
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The Rub of Time: Bellow, Nabokov, Hitchens, Travolta, Trump and Other Pieces 1986-2016
Martin Amis,
Jonathan Cape
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
MATCH INFO
Euro 2020 qualifier
Fixture: Liechtenstein v Italy, Tuesday, 10.45pm (UAE)
TV: Match is shown on BeIN Sports
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
ANALYSTS’ TOP PICKS OF SAUDI BANKS IN 2019
Analyst: Aqib Mehboob of Saudi Fransi Capital
Top pick: National Commercial Bank
Reason: It will be at the forefront of project financing for government-led projects
Analyst: Shabbir Malik of EFG-Hermes
Top pick: Al Rajhi Bank
Reason: Defensive balance sheet, well positioned in retail segment and positively geared for rising rates
Analyst: Chiradeep Ghosh of Sico Bank
Top pick: Arab National Bank
Reason: Attractive valuation and good growth potential in terms of both balance sheet and dividends
57%20Seconds
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Company%20profile
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UAE currency: the story behind the money in your pockets
Sam Smith
Where: du Arena, Abu Dhabi
When: Saturday November 24
Rating: 4/5
When Umm Kulthum performed in Abu Dhabi
Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.
