Since the mid 19th century, when it became possible to extract oil in a rational way, oil has played a central role in the development of modern society. Since then, consumption of oil and petroleum products has risen continuously and they are now the single largest commodity group in international trade. But what will the picture look like if we look ahead – will the demand for oil as an energy carrier decrease as renewable energy sources begin to increase in importance? And how will this impact on the trade in oil?
The advantages of oil include a high energy content, in combination with the fact that it is relatively easy to transport and store, and its price. This has made oil the leading global energy raw material. Although global dependence on oil is decreasing relatively speaking, it still meets more than third of the total global energy requirements. With a few exceptions, total global consumption has risen continuously every year. In the last 30 years, oil consumption has almost tripled, from about 30 millions barrels per day to more than 84 million barrels per day in 2009, just under half of which is transported by sea.
Oil is needed despite increasing use of renewable energy
A general desire to reduce carbon dioxide- related emissions in combination with rising – and at times record high – oil prices has resulted in an increasing focus on other types of fuel and energy sources in recent years. For example, the utilisation of renewable energy sources, not least wind power, has increased. A prerequisite for moving towards a more sustainable society is more efficient and intelligent utilisation of energy.
This trend has started from a low level and growth in the future will have to increase sharply to be able to meet the anticipated rise in energy consumption. The US Department of Energy estimates that the total global energy consumption between 2005 and 2030 will increase 50 percent. Oil is expected to account for 35 percent of this increase, which means that it will still play an important role in global energy consumption in the future.
Growing demand for transportation
The demand for transportation of oil and refined petroleum products varies to a large extent depending on the general demand for oil. Several factors indicate that demand will increase in the years ahead.
- Rising demand for energy due to greater prosperity and growing populations
According to estimates made by the UN among others, the world population will increase about 35 percent by 2050, from 6.8 billion today to about 9.2 billion. This increase, together with more of the population enjoying greater prosperity, is one of the main reasons why the demand for energy is expected to rise sharply.
- Long distances between producers and consumers
A large proportion of the world’s total oil reserves are located far from the end users. North America, Europe and Eurasia together account for more than half the total oil consumption. At the same time, the oil reserves comprise about only 15 percent of the total oil deposits. Major new oil deposits have not been discovered for many years even though oil exploration activity has never been higher.
When oil-producing countries’ own production decreases, an increasingly large part of their demand will have to be met by imports, mainly from the Middle East, which now has about 60 percent of the total oil reserves.
- Expansion of refinery capacity in the Middle East and Asia
The expansion of refinery capacity currently in progress in locations far from the end consumers will benefit the product tanker market. To date, much of the re- fining has been done in North America or Europe. The capacity now being built up is largely located in large parts of the Middle East and Asia – not least in India and China. One consequence of this is that refined petroleum products are being transported increasingly long distances in order to reach the end consumers in e.g. North America and Europe. In addition to a generally increasing demand, this is resulting in increasingly tough demands on safety.
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