Global demand for oil will peak within the next 20 years
Clean energy is set to hit many oil-producing nations unless they reduce dependence on it, warns the IMF
Global demand for oil will peak within the next 20 years, sending many Middle East producing nations into a financial crisis, warns the International Monetary Fund (IMF).
Growing demand for "clean energy", the power generated from renewable sources, lies behind this predicted drop.
In its report on the future of oil, the IMF predicts that demand will peak at about 115m barrels a day. As a result, it says, countries that rely on oil exports to balance their books face dire financial straits without major reform, risking further de-stabilising the already war-torn region.
Governments in many of these oil-producing nations are underprepared for this global shift away from fossil fuels, specifically the six Middle Eastern countries comprising the Gulf Co-operation Council (GCC) – including Saudi Arabia and the United Arab Emirates – whose financial wealth could disappear by 2034, it states.
The GCC nations would be the hardest hit because of their reliance on oil. Many have ultra-low tax rates and for years have used oil revenues to fund affluent lifestyles.
The IMF says these nations need to reduce government spending and increase non-oil revenues. “Oil-exporting countries may need to be ready for a post-oil future sooner rather than later," it said.
The GCC, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, accounts for more than 20 per cent of the world’s total production of crude oil of nearly 101m barrels a day (b/d). The US is the world’s top oil-producing country with an average of 17.87m b/d, 18 per cent of global production.
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