ExxonMobil has presented its new forecast for energy markets for the year 2040, The Outlook for Energy: A View to 2040. This is an interesting read regardless how much stock you place on long-term forecasts. This works sets the direction for the entire oil industry. There are a number of clear themes from this forecast which should affect all in the energy markets.
First, there will not be significant demand increases from the OECD countries because there will be continued significant increases in energy efficiency. The developed world will produce more with less. Second, as a result, there will be a significant shift in energy demand to the non-OECD countries. The emerging markets will be the were all the demand increases will be coming from. The whole energy market will shift to Asia. Third, the world will move to become more natural gas driven. Finally, trade flows will change with the new pattern of demand.
Think of the significant change in capital flows and logistics over the next decade. Refining and infrastructure will be focused in Asia. Tanker flow will be toward Asia. Trading of oil will move away from North America and into the Asian time zone. The Asian countries will have more interest in the geopolitical developments in the Middle East. The US will become more oil independent and may actually be an exporter of natural gas. Capital will also be needed for more infrastructure developments in electricity. More urbanization will lead to greater electricity demand. A global system that has focused on OECD growth will now have to shift to emerging markets.
First, there will not be significant demand increases from the OECD countries because there will be continued significant increases in energy efficiency. The developed world will produce more with less. Second, as a result, there will be a significant shift in energy demand to the non-OECD countries. The emerging markets will be the were all the demand increases will be coming from. The whole energy market will shift to Asia. Third, the world will move to become more natural gas driven. Finally, trade flows will change with the new pattern of demand.
Think of the significant change in capital flows and logistics over the next decade. Refining and infrastructure will be focused in Asia. Tanker flow will be toward Asia. Trading of oil will move away from North America and into the Asian time zone. The Asian countries will have more interest in the geopolitical developments in the Middle East. The US will become more oil independent and may actually be an exporter of natural gas. Capital will also be needed for more infrastructure developments in electricity. More urbanization will lead to greater electricity demand. A global system that has focused on OECD growth will now have to shift to emerging markets.
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