Food For Thought

September 18, 2020

Implications of the new BP scenarios for the tanker market

On Monday, 14 September, BP published its annual energy outlook for 2020.  In this outlook, BP outlines three alternative energy scenarios looking ahead to 2050.  BP stresses that they are not trying to give precise predictions 30 years out.  Doing that would guarantee failure.  Instead, the scenario’s, called Business-as-Usual, Rapid and Net Zero, help BP “understand the many uncertainties ahead – in the near and longer term – by considering a range of possible pathways the energy transition may take over the next 30 years. 

The three scenarios have very different outcomes, but even in Business-as-Usual, the least disruptive of the three, where governments don’t take drastic action to address climate change, global oil demand will remain around 100 million barrels per day for the next 20 years, before it starts to gradually decline (see chart).  The other two scenarios show a much more rapid decline in oil demand.  If any of these scenarios were to play out, the implications for the tanker market would be very dramatic.

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