The US Energy Information Administration (EIA) has recently published its outlook for energy markets through 2050. The document turned out to be thorough and informative, even though the forecast is not encouraging. Yet, there are also reasons for optimism.
Analysts stress that there is no point in hoping for a recovery in demand and consumption in the near future. According to their calculations, energy consumption will return to the pre-crisis levels in at least 10 years if no negative factors interfere. "It will take a while for the energy sector to get to its new ‘normal'. The pandemic triggered a historic energy demand shock that led to lower greenhouse gas emissions, decreases in energy production, and sometimes volatile commodity prices in 2020," the report reads. The coronavirus pandemic has already led to irreparable losses in the global oil market. If countries re-introduce nationwide lockdowns, consumption levels will recover only in 2050.
Among the doom and gloom statements, there are some remarks that boost optimistic sentiment. For instance, experts believe that the oil price may soar. By 2050, it may rise to the level of $173 per barrel, which will be the highest price in history. In a positive scenario, the oil will cost $95, while in a negative scenario, its price will amount to just $48.
Another reason for the sharp drop in the cost of commodities could be the tightening of the carbon policy in developed countries, including the United States. The country is planning to radically reduce the demand for oil by 2050 to combat global warming.