Global demand for oil is likely to peak around 2030, as the world recovers from the impact of COVID-19, according to Musabbeh Al Kaabi, CEO of Petroleum and Resources at the UAE’s Mubadala Investment Company.
In a wide ranging interview, conducted as part of the ADIPEC Energy Dialogue series, Al Kaabi shared his outlook on the recovery of oil and gas markets and the long term impact of demand post COVID-19 on energy supply and demand.
Al Kaabi said COVID-19 caused oil demand to drop by 30 per cent in March and April, from a peak of 100 million barrels per day at the end of 2019. However, demand has started to recover, he added, reaching levels seen in the 1990s and will rise further over the coming 12 months.
Reflecting on the long-term impact of COVID-19, Al Kaabi said the post COVID-19 world be totally different, with fewer people travelling and lower activity in a number of sectors of the economy. And, while demand for energy will edge back to 2019 levels, some sectors, such as jet fuel, will take longer to recover than others.
"Predicting the oil market is very challenging. COVID-19 has created major disruption to demand and we expect to see the continuation of that disruption in 2021. But if you project the horizon to 2030, we will go back to an acceptable level of growth, potentially peaking in 2030," said Al Kaabi.
Addressing concerns over future supply issues, Al Kaabi said climate change pressures, concerns over ESG and government policies are impacting the investment decisions by big international oil companies, which could result in episodes of disruption of supply. But he added, this would create space for national and privately owned oil companies to invest in the upstream sector.
Al Kaabi added national and international oil companies should learn from history and be more proactive in dealing with the decarbonisation of their operations:
"In the past companies put themselves in a defensive mode when they should have deployed and promoted innovative technology to minimise the carbon footprint of their production.
"I see a similar trend in the petrochemicals sector, where it is critical companies address the plastics waste issue and not be in a state of denial," Al Kaabi said. However, he added, he is optimistic emerging technology will help the downstream sector address this and other challenges it faces.
The ADIPEC Energy Dialogue is a series of weekly online thought leadership events created by dmg events, organisers of the annual Abu Dhabi International Exhibition and Conference. Featuring key stakeholders and decision-makers in the oil and gas industry, the dialogues focus on how the industry is evolving and transforming in response to the rapidly changing energy market.
With this year’s in-person ADIPEC exhibition and conference postponed to November 2021, the ADIPEC Energy Dialogue, along with insightful webinars, podcasts, and online panels continue to connect the oil and gas industry, with the challenges and opportunities shaping energy markets in the run-up to and following, a planned four-day live-stream virtual ADIPEC conference taking place from November 9-12.
An industry-first of its kind, the online exhibition, conferences and awards ceremony will bring together energy leaders, ministers, global oil and gas CEOs as well as the engineering faculty to assess the collective measures the industry needs to put in place to fast-track recovery, post COVID-19.
To watch the full ADIPEC Energy Dialogue go to: https://www.youtube.com/watch?v=d2IOoX1cVfw&t=519s.