Western Europe is in an uncomfortable and in some ways paradoxical position: it is leading the way in the green transition (neither America nor China nor others have set such ambitious and short-term goals) and this should place it in a position of advantage in the future. , but in the present it is suffering the impact of the rise in oil and coal prices, and renewable energies are stabbing it in the back. In 2021, a Bloomberg report says, wind in Europe was less frequent and less intense than average, dropping wind production and raising doubts about the wisdom of relying on such an unpredictable resource. It had to make up for with coal and gas power plants. Hydropower is also doing badly: the rainfall has been lower than expected and the reservoirs of the dams are below average. Germany and Denmark are particularly affected, heavily dependent on submarine cables that connect them to the hydroelectric plants of Norway, now in production deficit. Again, more coal and more methane are being remedied.
All this while coal and hydrocarbons were already rising on their own, under the double thrust of the post-Covid global economic recovery and years of divestments in traditional energy sources, considered obsolete. Now the very strong demand is contrasted by an inadequate supply, and the result is that in this period in Europe we pay for coal around dollars per ton (the international price is counted in dollars), that is four times the average of 2020 (around 50 dollars); natural gas does much worse, as the production of energy from this source has risen to 85 euros per megawatt / hour, from 12 euros a year ago; while oil almost makes a good impression, given that the Brent which is the reference in Europe has only doubled, from an average of 42 dollars in 2020 to about 80 today.
To say oil is to say the Middle East (in the not geographical but anthropological meaning of the expression, which includes in North Africa). This region of the world has never been easy to “read”, but in recent years it has gotten even stranger. At one time the local wars caused the price of crude oil to skyrocket, while in recent times the bloody chaos in ISIS Iraq and in Libya of Turkish and Russian tribes and processors has been accompanied by falls in the price of the barrel. This is partly due to the fact that the fighters learned not to destroy the wells, rather than burn them as Saddam Hussein did in Kuwait, so the flow of crude continued smoothly. Put under pressure in the last few years by American shale oil and the pandemic crisis, Middle Eastern oil is now enjoying the strong recovery in international demand for hydrocarbons. And OPEC, an association of exporters dominated by a handful of Middle Eastern countries, also sees pink in the long-term future.
His research department predicts that the demand for oil in the world will increase until 2045 and that until then crude oil will remain the main energy source, despite the progressive growth of renewable sources. According to OPEC’s World Oil Outlook, developing countries will drive demand, while as early as 2023 the consumption of hydrocarbons in the richest states will begin to decline in a structural way.
Demand is expected to grow from 90.6 million barrels per day in 2020 to 108.2 million in 2045 (already in 2019, the last pre-Covid year, it had exceeded 100 million. More in detail, OPEC predicts that global demand will increase rapidly in the next few years and then slow down and almost stabilize after 2035, when it will reach 107.9 million barrels per day. The contribution of oil to world energy production is also expected to grow in the near future. and declining only in the long run: from 30% last year it should gradually rise to over 31% in 2025 before starting to decline to 28% in 2045. However, oil will not disappear from the global market for many decades to come.