BP issues energy outlook for 2022 with 3 scenarios

Oil drilling rigs

London-based BP plc changed its outlook on energy demand from the 2020 forecast that the world reached peak demand for crude oil and other liquids at nearly 100 million barrels per day (bpd) in 2019.

BP revised the forecast in its recently-issued 2022 annual energy report, noting that the economic impact of COVID-19 looks to be less severe than previously anticipated, pointing to a stronger-than-expected outlook for energy demand and carbon emissions in the near term.

The outlook was largely prepared before the military action by Russia in Ukraine, which pushed the global energy prices higher and created uncertainty about the Russian oil and gas sector in the last few weeks, BP added.

BP’s Energy Outlook 2022 is focused on three main scenarios: New Momentum, Net Zero and Accelerated, which explore a wide span of possible outcomes as the world transitions to a lower carbon energy system.

New Momentum is the most optimistic scenario, BP expects demand for crude to rise to 101 million bpd in 2025, and to hold steady in 2030.

Demand is later projected to fall to 98 million bpd by 2035 and to 92 million bpd in 2040.

Net Zero is related to global climate ambitions. Demand for oil is seen at 98 million bpd in 2025 and 75 million bpd by 2035.

For this scenario to materialize, BP assumed that carbon emissions should be reduced by 95%.

Accelerated assumes that the world will be largely in line with climate goals. CO2e emissions in Accelerated fall by around 75% by 2050 (relative to 2019 levels).

Based on this scenario, oil demand will near 96 million bpd in 2025 and 85 million in the decade later.