The International Energy Agency (IEA), the International Energy Forum (IEF) and the Organization of the Petroleum Exporting Countries (OPEC) hosted the 11th IEA-IEF-OPEC Symposium on Energy Outlooks to examine the impact of the COVID-19 pandemic on global energy markets and the outlook for global energy security and market stability.
Hosted by the IEF, the symposium reviewed the IEA’s and OPEC’s short-, medium- and long-term outlooks, which are analysed in the newly released IEF-RFF Outlooks Comparison Report. Produced by the IEF and Resources For the Future (RFF), the report posted on the IEF website highlights a reset in energy outlooks after the biggest demand shock in history last year.
“The pandemic’s impact on energy demand is unparalleled in the history of energy markets,” says IEF Secretary General Joseph McMonigle. “The symposium explored what government policies and industry responses are necessary to safeguard the long-term stability of energy markets.”
Among the report’s major findings were that the pandemic led to oil demand contracting by 9-10 million barrels per day in 2020, but it is expected to rebound by 5-6 million barrels per day this year. The pandemic has also led to a downward revision in long-term annual economic growth by as much as 0.8 percentage points in some outlooks, the report noted.
The Symposium is part of a wider joint program of work by the three organizations originating from the 12th International Energy Forum held in Cancún, Mexico in March 2010. The Symposium was live-streamed and open to the public.
Dr Fatih Birol, the Executive Director of the IEA, said: “Dialogue and cooperation will be increasingly vital to steer the global energy system towards a future that is fit for tomorrow’s generations, where energy is abundant, affordable, clean and is used to underpin growth and development.”
In his opening remarks to the Symposium, Mr. Barkindo recognized the vital contributions of the OPEC and non-OPEC countries participating in the Declaration of Cooperation (DoC) in helping to stabilize the oil market over the past year, and the importance of close dialogue with the G20, the IEA and IEF in supporting market rebalancing efforts. He also emphasized the need for continued investment in the oil industry to ensure stability of supply and to help maintain an inclusive approach to addressing climate change, the energy transition and energy access challenges. "These investments are essential for both producers and consumers," he said.
"In our fast-changing and unpredictable world, we seek to contribute to greater stability, more predictability and enhanced transparency," the OPEC Secretary General told the Symposium. "We constantly seek to improve our capacity to do so, for we believe this will help us build a better future, one which serves the interests of generations of producers and consumers."
HE Yury Sentyurin, GECF Secretary General, said: “Despite the pandemic, GECF Members have displayed outstanding discipline and resilience in the uninterrupted fulfilment of their obligations towards all contracting parties.”
“It is too early to write off hydrocarbons as they will remain the dominating source in the global energy mix for the foreseeable future,” he added.
Other key findings in the IEF-RFF Outlooks Comparison Report include:
- Fossil fuels are expected to dominate the primary energy mix thru 2040, even in scenarios where countries meet the Paris Agreement’s climate goals.
- The gap between current pathway scenarios and alternative scenarios is large and growing annually, signalling that the zero-carbon emissions scenario may not be achieved.
- Demand for oil is expected to be stable over the long term globally, although demand will likely shift from developed to developing countries.
- Differing outlooks on the expected importance of hydrocarbons suggest that new technologies such as carbon capture, use and storage (CCUS) could have a bigger role to play.
- Nuclear, hydro, wind and solar will account for a majority of growth in the electricity sector, while coal is expected to decline and natural gas faces an uncertain future as a transition fuel.
- Growing climate ambitions in the lead up to COP26 will have significant implications for the energy sector, which accounts for three-quarters of global emissions.