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BP Energy Outlook mulls peak oil demand, Covid impact

  • Spanish Market: Crude oil
  • 13/09/20

Global oil demand has already peaked in two of the three scenarios BP has modelled in its 2020 Energy Outlook. And there is a chance that the Covid-19 crisis will lead to acceleration of the energy transition, BP said.

"This year's Outlook explores three main scenarios — Rapid, Net Zero and Business-as-usual — which span a wide range of possible outcomes," chief executive Bernard Looney said. "Those three scenarios have helped us to develop a strategy that we think is robust to the uncertainty around the pace and nature of the energy transition."

BP is presenting on 14-16 September more details on how it plans to deliver on its ambitious new strategy unveiled a month ago, which includes its oil production dropping by 40pc and low-carbon investments jumping tenfold by 2030.

The Energy Outlook's Rapid Transition scenario envisages a series of policy measures that result in carbon emissions from energy use falling by about 70pc by 2050. The Net Zero scenario sees the measures of the Rapid scenario "both added to and reinforced by significant shifts in societal behaviour and preferences", resulting in carbon emissions from energy use falling by over 95pc by 2050. And the Business-as-usual scenario assumes "that government policies, technologies and social preferences continue to evolve in a manner and speed seen over the recent past".

All three scenarios show that oil and gas "will be increasingly challenged as society shifts away from its reliance on fossil fuels" while "renewable energy, led by wind and solar power, is the fastest growing source of energy over the next 30 years".

Oil demand has already peaked in the Rapid and Net Zero scenarios, while "after recovering from the impact of Covid-19, the consumption of liquid fuels in Business-as-usual is broadly flat at around 100mn b/d for the next 20 years, before edging lower to around 95mn b/d by 2050," BP said.

"The level of oil demand in both Rapid and Net Zero does not fully recover from the sharp drop caused by Covid-19, with demand falling by around 50pc by 2050 in Rapid and almost 80pc in Net Zero," the Outlook said.

But "US tight oil in Rapid recovers from the impact of Covid-19 and expands until the early 2030s, with this increase in output more than offset by falls in Opec," it said. "Thereafter, Opec production broadly stabilises as declines in global demand are broadly matched by falls in US tight oil and other non-Opec supplies."

Shell revealed last week that global oil demand peaks before 2030 in two of the three "pathways" the company modelled in the new Covid-19 world.

BP said that Covid-19 is "assumed to have a persistent impact on economic activity and energy demand". This impact could be as high as a 5mn b/d hit on oil demand by 2025, the Outlook shows.

"There must be a chance that the increasing fragilities associated with the way we are operating on our planet highlighted by Covid-19, combined with the increased momentum in terms of Building Back Better, and together with unprecedented levels of government intervention — there is a chance that Covid-19 leads to acceleration in the energy transition," BP chief economist Spencer Dale said.


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16/06/25

Opec keeps oil demand growth projections unchanged

Opec keeps oil demand growth projections unchanged

London, 16 June (Argus) — Opec has kept its global oil demand growth forecasts for this year and next unchanged. The group sees oil consumption growing by 1.29mn b/d to 105.13mn b/d in 2025 and by 1.28mn b/d to 106.42mn b/d in 2026, according to its latest Oil Market Report (OMR) released today. These projections remain markedly higher than the IEA's forecasts . Opec upgraded its first quarter demand estimate, based on actual data, but said this increase was offset by lower expectations of oil demand in key consuming countries China and India in the second quarter and later in the year, mostly driven by US trade policies. In terms of supply, Opec downgraded its 2026 non-Opec+ liquids supply growth forecasts for a third month in a row, mainly driven by the effects of lower oil prices on US shale producers. Opec now sees non-Opec+ liquids supply growth growing by 730,000 b/d in 2026, compared with 800,000 b/d in last month's OMR. Opec expects US liquids output growth of 210,000 b/d, down from 460,000 b/d in March. But the group kept its 2025 non-Opec+ liquids supply growth forecast unchanged at 810,000 b/d. Opec made no reference to the ongoing conflict between Israel and Iran in its report, suggesting the hostilities have not affected its supply and demand balances. The Opec secretariat last week criticised the IEA for saying it was ready to release emergency oil stocks if necessary. Opec said there were currently "no developments in supply or market dynamics that warrant unnecessary actions" and that such statements raise "false alarms" and project "market fear." Opec+ crude production — including Mexico — rose by 180,000 b/d to 41.23mn b/d in May, according to an average of secondary sources that includes Argus . Opec puts the call on Opec+ crude at 42.7mn b/d in 2025 and 43.2mn b/d in 2026. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US oil output set for first decline in 2026 since covid


16/06/25
16/06/25

US oil output set for first decline in 2026 since covid

New York, 16 June (Argus) — US shale oil output is poised to decline in 2026 for the first time in five years on lower crude prices — notwithstanding the spike that followed this week's Israeli attacks on Iran — and a slowdown in rig activity, throwing a wrench in President Donald Trump's plans to open the production floodgates during his second term. US crude output next year is due to average 13.37mn b/d, down from an expected 13.42mn b/d in 2025, according to a monthly report from government agency the EIA last week. That would be the first annual decline since 2021, when the pandemic throttled oil demand. The latest projection from the statistics arm of the US Department of Energy is a far cry from the 150,000 b/d gain expected for 2026 just a few months ago, but tallies with a growing chorus of warnings from shale producers that activity is at risk of tapering off in a lower oil price environment caused by a combination of Trump's trade wars and the accelerated unwinding of Opec+ cuts. The agency cited a larger-than-expected drop in the number of active rigs last month than what it had anticipated in its Short-Term Energy Outlook (STEO) for May. "With fewer active drilling rigs, we forecast US operators will drill and complete fewer wells through 2026," the EIA said. Increased caution on the part of producers has seen the US rig count slide to its lowest since late 2021, while the inventory of drilled but uncompleted (DUC) wells has been accumulating as companies hold off for the time being. While leading shale producers such as Diamondback Energy have already raised the alarm over peak output, the administration has countered that with efforts to slash red tape and free up permitting that it hopes will underpin the sector's growth potential over the long term. Next year's anticipated decline will be partially offset by an uptick in offshore output from the Gulf of Mexico as several projects start up. Production from the region is forecast to edge up to 1.85mn b/d next year from an expected 1.81mn b/d in 2025. The EIA expects 13 fields in the Gulf of Mexico to start oil and natural gas production this year and next — more than half of which will be developed using sub-sea tiebacks or extensions to floating production units — as an area that was overshadowed during the shale boom enjoys a revival. No big deal But the shale patch slowdown is already filtering through to deal-making. While fewer mergers and acquisitions have been announced in recent months compared with the dizzying pace seen in the past few years, there have been some notable exceptions of late. US independent EOG Resources last month swooped in for privately held Encino Acquisition Partners in a $5.6bn deal to expand its footprint in the Utica shale of Ohio. By doubling down on an up-and-coming basin in its first major acquisition in almost a decade, EOG avoided the lofty valuations seen in the increasingly crowded Permian basin of west Texas and southeastern New Mexico. And earlier this month, Viper Energy — a unit of Diamondback Energy that owns and acquires mineral and royalty interests — agreed to buy Sitio Royalties for $4.1bn to expand its Permian position. "Mineral interests offer the highest form of security and upside in the oil field, and any and all benefits an operator manages to unlock accrue directly to the mineral holder without any capital risk, forever," Diamondback chief executive Kaes Van't Hof says. And despite the recent headwinds spurred by Trump's on-and-off again tariffs and a deteriorating economic outlook, long-term oil price projections in a recent survey of banks by law firm Haynes Boone were little changed from autumn. That suggests lenders that took part view the current volatility as temporary. By Stephen Cunningham DPR-5 shale oil production drivers US tight oil production Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia’s Santos supports $19bn Emirati oil takeover


16/06/25
16/06/25

Australia’s Santos supports $19bn Emirati oil takeover

Sydney, 16 June (Argus) — A consortium led by XRG PJSC, a subsidiary of Abu Dhabi's state-owned Adnoc, has put forward a A$28.8bn ($18.7bn) cash takeover bid for Australian independent oil and gas producer Santos Energy, a move that is supported by the Santos board. The Abu Dhabi Development Holding Company (ADQ) and US private equity firm Carlyle are also part of the consortium. The consortium offered to buy all of Santos' ordinary shares at A$8.89 ($5.76) per share, Santos announced on 16 June. The offer price is 28pc higher than Santos' closing share price of A$6.96 on 13 June, before the takeover bid was announced. Its share price has since risen to A$7.82 on 16 June. The Santos board intends to support the buyout and will recommend its shareholders vote in favour of the takeover, subject to reaching acceptable terms, it said in a statement on 16 June. Santos' headquarters are based in South Australia and there are levers in place to ensure the government has a say in the potential takeover, the state's minister for energy and mining Tom Koutsantonis said. A change in ownership of a licence holder must be approved by the minister under the Petroleum and Geothermal Energy Act to ensure that the state's interests, including protecting Santos jobs, are properly served, Koutsantonis said. The potential takeover will be conditional on further negotiation by the consortium and subject to approval from regulators, including the Australian Securities Exchange and the Foreign Investment Review Board. Santos first raised the possibility of a merger in 2023 . Australian independent Woodside Energy expressed interest in a $53bn merger, but it was called off in early 2024. Woodside has instead partnered with US LNG developer Tellurian and Saudi Arabia's state-owned Aramco . By Grace Dudley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Israel’s Haifa refinery hit in Iran missile attack


15/06/25
15/06/25

Israel’s Haifa refinery hit in Iran missile attack

London, 15 June (Argus) — Israel's 197,000 b/d Haifa refinery has suffered damage from an Iranian missile attack but remains operational, operator Bazan said on Sunday. "The refining facilities continue to operate, while some downstream facilities at the complex have been shut down," it said. Bazan said that the attack damaged pipelines and transmission lines between the facilities in the complex in a "localised manner." The damage to the refinery marks the first direct Iranian attack on Israel's energy infrastructure since the latest round of hostilities began on Friday, 13 June. They also follow Israeli drone attacks on two gas treatment facilities in southern Iran. Iran's oil ministry said today that Israel had hit an oil storage facility in Tehran's northwestern Shahran district late on Saturday. This caused a blaze that spread to "two or three" tanks storing oil products, the Tehran fire department said. A second depot in the district of Rey, in southern Tehran, was also targeted, resulting in another fire. The oil ministry said the fires at both locations have been brought under control. Iran's oil minister, Mohsen Paknejad made a visit to the Rey depot on Sunday to survey the damage and the ongoing restoration work. Israel has temporarily taken two key gas fields offline as a precautionary measure due to the conflict. By Aydin Calik and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Israel strikes Iran gas plants in first energy attacks


14/06/25
14/06/25

Israel strikes Iran gas plants in first energy attacks

Dubai, 14 June (Argus) — Israel launched drone strikes on two gas treatment facilities in southern Iran on 14 June, marking the first attacks on energy infrastructure since the latest round of hostilities began on 13 June. Israeli drones targeted a gas treatment plant in Assaluyeh that processes sour gas from phase 14 of the offshore South Pars gas field, Iranian state media reported. South Pars, which Iran shares with Qatar, is the world's largest gas field and has 24 development phases. Images and videos circulating on social media showed parts of the Assaluyeh facility on fire. The plant includes four gas sweetening trains, each with a capacity of 14mn m³/d, enabling total output of up to 56mn m³/d from phase 14. At full capacity, the phase can produce 77,000 b/d of gas condensate, 2,900 t/d of LPG, 2,750 t/d of ethane and 400 t/d of sulphur. One of the four trains was hit, temporarily halting 12mn m³/d of production from one offshore platform, according to state media. A separate fire broke out at the Fajr-e-Jam gas processing plant, which handles gas from both South Pars and the Kangan field, and produces around 200 t/d of LPG and 80 t/d of gas liquids. Iran's oil ministry said emergency teams were deployed to both sites immediately after the incidents, helping to contain the fires. South Pars has been in production since 2002 and accounts for 70–75pc of Iran's total gas output. The field also supplies a significant share of feedstock for Iran's petrochemical and gasoline production. The Qatari portion of the field is known as the North field. Saturday's attacks are the first time either side has targeted energy infrastructure. Israel focused on military and nuclear sites in Natanz, Isfahan and Fordow when it launched its initial attacks in the early hours of 13 June. Iran responded with ballistic missile and drone strikes on military targets in Israel, including the Kirya complex in Tel Aviv, which houses the defence ministry headquarters. Further Israeli strikes on Iranian energy infrastructure could threaten up to 3.4mn b/d of crude output and around 1.5mn b/d of exports. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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