World Oil Demand to Increase Sharply

by Lisa Bryant

Oct 27, 2004 Paris - A new report by the Paris-based International Energy Agency says world energy demand is expected to surge by up to 60 percent by the year 2030. The group says much of the energy demand will come from Asian countries.

The new study comes as world oil prices are already at near record highs, trading at above $54 a barrel. If oil prices remain at these high levels, the International Energy Agency's executive director Claude Mandil warns, it could effect economic growth and jobs in developing countries.

The energy agency predicts that the bulk of rising energy demand in the coming years will be coming from developing countries like China and India. In 30 years time, the agency's chief economist, Fatih Birol says, developing countries will account for about half the world's total energy demand.

"They will be more and more vulnerable to higher oil prices in the future if oil prices go up," he said. "For example China today imports about 30 percent of its oil needs. And in 2030 this will be more than double."

The energy agency predicts that the bulk of rising energy demand in the coming years will be coming from developing countries like China and India. In 30 years, it predicts, developing countries will account for about half the world's total energy demand.

The agency's energy study also predicts that fossil fuels will continue to be the main energy source for many countries, and that oil demand will increase by roughly 1.6 percent annually. By the year 2030, the energy agency says, world demand for oil will hover around 121 million barrels a day, compared to current demand of about 82 million barrels a day.

In addition, the report warns of short-term risks to energy security, because an increasing share of oil will be pumped from volatile regions like Iraq, and those with the risk of political instability, like Saudi Arabia. The organization predicts that more and more oil will be coming from fewer countries, primarily those located in the Middle East. It says Russia's share in world oil exports will fall in the coming years.

In order to ensure more secure, long-term supplies, Mr. Birol says, countries must step up efforts to find alternative means to meet their energy supplies. He says governments, in particular, should speed up research and deployment of environmentally friendly new technologies.

The new study also predicts that demand for natural gas will double over the next three decades. Once again, the bulk of the increase will come from developing countries in Africa, Latin America and Asia.

reprinted from [AxcessNews.com]