The new energy outlook from UK-based oil major BP has revised down the amount of energy the Middle East will be supplying to markets by 2030.
Although the region is set to remain the world’s largest crude producer by some distance, oil supply is expected to grow at a slower rate than every other energy group, including natural gas, coal, nuclear, hydroelectricity, biofuels and other renewables.
BP revised its 2030 Middle East oil supply down by over 100 million barrels for 2030 with gas revised down by about 20 million barrels of oil equivalent (boe), while revising up North American oil and gas supply by about 230 million boe.
“The North American oil and natural gas supply outlook has been revised higher (14%) due to evolving expectations for shale gas and tight oil plays,” said BP in its 2013 outlook. “Higher tight oil output leaves the market requiring less Opec production, with overall Middle East oil output revised lower with knock-on effects for associated natural gas production.”
The emergence of unconventional gas and oil plays in North America will significantly change the regional balance of energy supply over the near term, altering the Middle East’s role as a global swing producer.
BP forecast that the US will surpass Russia and Saudi Arabia in 2013 and the largest liquids producer in the world driven by new capacity in tight oil and biofuels in addition to Opec production cuts affecting Saudi output.
Russia is set to replace Saudi Arabia in second place from this year until 2023 before the kingdom retakes the number one position by 2027. These three producers will supply over a third of the world’s liquid fuel needs in 2030, the energy firm predicted.
Although Saudi Arabia and other oil exporters in the Middle East will continue to play a pivotal role in the global oil supply, crude’s relative importance in the world’s energy makeup will slide over the next two decades.
In 2011, oil and coal contributed about the same to global energy supply at just under 4 billion boe but, while crude production is forecast to expand 16 per cent, coal output is set to rise 21 per cent, overtaking oil by 2030.
All other energy sources are expected to grow even faster, with gas expanding by 45 per cent to approach oil production levels. Nuclear and hydroelectricity supply is forecast to rise 62 per cent and 46 per cent respectively, while biofuels is predicted to more than double and other renewables to increase over four-fold from lower bases.
Oil demand growth is expected exclusively to come from non-OECD economies, with China, India and the Middle East account for almost all the net increase. Despite the re-emergence of North America’s role as a global energy supplier, the Middle East will remain well positioned to feed expanding economies at home and in the east.