Oil could plummet to $10 by 2050 if Paris climate goals are achieved

A derek pumps in an oil area in Kuwait close to the Saudi Arabian border.

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LONDON — The worth of oil could plunge to as little as $10 a barrel by 2050 if the world succeeds in electrifying the power market and assembly Paris Agreement goals, a consultancy stated on Thursday. 

Energy analysis and consultancy Wood Mackenzie stated in a report that if world leaders took decisive motion to restrict international warming to 2 levels Celsius by 2050, as set out within the landmark Paris climate accord, oil demand would drop “significantly.” 

Wood Mackenzie stated beneath its accelerated power transition state of affairs, the power market can be more and more electrified by way of to 2050, squeezing out essentially the most polluting hydrocarbons, like oil. 

Under this state of affairs, oil demand could fall 70% by 2050 from present ranges, the report stated.

Wood Mackenzie forecast demand for oil would begin to fall from 2023 beneath this state of affairs and this decline would shortly speed up thereafter, with year-on-year falls of round 2 million barrels a day. 

The report stated oil costs could go into “terminal decline,” with worldwide benchmark Brent crude falling to between $37 and $42 a barrel by 2030.

Brent crude futures traded at $66.29 a barrel throughout morning offers in London, down round 0.4%. 

Wood Mackenzie stated oil costs could slide to between $28 and $32 a barrel by 2040, earlier than slipping to between $10 and $18 a barrel in 2050.

Big Oil ‘can’t afford to be complacent’

Almost 200 nations ratified the Paris climate accord in 2015, agreeing to pursue efforts to restrict the planet’s temperature enhance to “well below” 2 levels Celsius above pre-industrial ranges and to pursue efforts to cap the temperature rise at 1.5 levels Celsius. It stays a key focus forward of COP26, though some climate scientists now imagine that hitting the latter goal is already “virtually impossible.” 

To ensure, a United Nations evaluation revealed on Feb. 26 discovered that pledges made by nations all over the world to curb greenhouse fuel emissions have been “very far” from the profound measures required to keep away from essentially the most devastating impacts of climate breakdown.

Ann-Louise Hittle, vice chairman for macro oils at Wood Mackenzie, confused that the consultancy’s report was a state of affairs slightly than a “base-case forecast.” 

“Even so, the oil and gas industry cannot afford to be complacent,” she added. “The risks associated with robust climate-change policy and rapidly changing technology are too great.” 

— CNBC’s Sam Meredith contributed to this report.