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Navigating the crossroads: the global oil and mobility sectors at a critical juncture in 2024

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New Delhi (India), March 30 (ANI): In 2024, the global oil and mobility sectors find themselves at a crossroads, navigating a maze of complex geopolitical, technological and economic dynamics.

According to SP Global Commodity Insights, this juncture represents a moment of profound importance, as these industries face a myriad of challenges and opportunities that are poised to redefine their very landscape.

From geopolitical tensions to rapid technological advancements to shifting economic paradigms, the coming year promises transformative changes, ushering in a new era in oil and mobility.

The OPEC alliance finds itself at a crossroads, facing the challenge of navigating between reducing oil supply to raise prices and defending its market share amid escalating conflict and growing production in the Americas.

With unused production capacity close to 5 million b/d, particularly concentrated in Saudi Arabia and the United Arab Emirates, the strategic direction of the alliance for 2024 remains uncertain, accentuated by the departure of Angola from the group.

The United States and Canada are emerging as dominant players in global oil and gas production, driven by progress in the Permian Basin, Canadian tar sands and American shale gas.

Despite the challenges, a substantial increase in production is expected in 2024, subject to stable oil prices.

This increase highlights the central role of North America in meeting global demand for liquid fuel.

China’s oil demand is expected to see a notable slowdown in growth, attributed to a variety of factors including a tepid post-pandemic recovery, a cooling real estate market and a shift to a services-oriented economy.

The expected moderation in demand highlights a changing dynamic in China’s energy consumption landscape.

The momentum of electric vehicle (EV) adoption in China has accelerated remarkably, thanks to policy incentives and infrastructure development.

In contrast, Europe and the United States are seeing more gradual increases in their EV market share, although with signs of potential acceleration.

These developments speak to a changing global landscape in which electric vehicle adoption could gain even more traction.

China’s strategic use of lithium iron phosphate batteries and its dominance in the global battery supply chain positions it favorably to influence BEV affordability worldwide.

The growing emphasis on electric vehicles over internal combustion engine vehicles suggests downward pressure on electric vehicle prices, although tempered by possible shortages of raw materials for batteries.

Global oil demand is expected to slow in 2024, driven by trends in global GDP growth and oil prices.

The main drivers of demand are jet fuel, diesel and gasoline, with uncertainties such as oil price volatility and geopolitical events potentially leading to deviations from anticipated growth trajectories.

Latin America’s oil production is poised to reach new heights, propelled by major offshore developments in Brazil and Guyana.

Their strategic positions as key suppliers to major markets highlight their central role in maintaining the stability of global oil supplies.

The United States and the Eurozone play a key role in driving global GDP, while Asia, particularly China, India and Southeast Asia, remains a key support, contributing to 60 percent increase in oil demand.

Oil production from sanctioned suppliers is expected to remain stable in 2024, with geopolitical tensions complicating further supply expansion.

Changes in trade dynamics toward the Asia-Pacific region reflect the complex interplay between global oil policy and market demands.

The redirection of sanctioned oil to Asia-Pacific markets is remarkable, with Russian exports to Asia jumping from 36 percent to 83 percent after the sanctions.

However, Iranian and Venezuelan exports declined, with China and India becoming the main buyers.

Forecasts for upstream investments are clouded by uncertainties surrounding the pace and scale of the energy transition.

Government policies and industry commitments will crucially influence upstream investments, with accelerated efforts expected in methane reduction and carbon capture technologies.

The upcoming US elections in November will have profound implications for international relations, trade policies and environmental commitments.

The outcome could reshape the strategic calculus of oil markets and mobility sectors around the world, underscoring the importance of political developments in shaping global energy landscapes.

As the global oil industry faces these multi-faceted challenges and opportunities, strategic foresight, adaptability and collaborative efforts will be paramount in moving towards a sustainable and resilient future. (ANI)

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