Royal Dutch Shell believes that the demand for oil could reach its peak in the next five years.
According to the supermajor’s Chief Financial Officer, this could be led by efficiency and substitution.
“We’ve long been of the opinion that demand will peak before supply. And that peak may be somewhere between 5 and 15 years,” CFO Simon Henry told media sources at a conference on Tuesday.
Oil Demand Nears Peak, Shell Says
This forecast by Shell goes against other recent predictions by oil majors, such as ExxonMobil’s view that “global demand for oil and other liquids is projected to rise by about 20% from 2014 to 2040”.
“We expect oil to remain the world’s largest energy source, essential to transportation and as a feedstock for the petrochemicals industry,” Exxon’s report reads.
Shell CEO Ben van Beurden
The International Energy Agency’s (IEA) latest World Energy Outlook publication, had predicted a growth in demand by nearly one-third between 2013 and 2040, with net growth driven entirely by developing countries.
In the meantime, Saudi Aramco’s CEO Amin Nasser announced on Tuesday he expects crude oil prices to rebound in 2017, while demand should also remain relatively high.
Shell Maintains Hopeful Outlook
“Even if oil demand declines, its replacements will be in products that we are very well placed to supply one way or the other, so we need to be the energy major of the 2050s,” Henry stated further.
“That underpins our strategic thinking. It’s part of the switch to gas, it’s part of what we do in biofuels, both now and in the future,” he added.
According to Shell, oil and gas will remain “part of the energy mix for many decades to come”.
In its third quarter report launched on Tuesday, Shell CEO Ben van Beurden said the outlook “remains uncertainly” and the company’s main aim is to turn the firm into “a world-class investment”.
The company continues to work on the implementation of its planned US$30 billion divestment programme, with 16 material asset sales planned.