Who Will Pump the World's Last Barrel of Oil?
Feb 16 2019
While some experts predict oil demand could peak by as early as 2023, Saudi Arabia isn't buying into the narrative and asserts it will continue to pump oil for decades to come. As OPEC’s largest producer, Saudi Arabia currently produces around 12 million barrels of oil per day. The Kingdom expects global oil demand to continue rising until at least by 2040 and considering low production costs, considers itself the best equipped country to meet rising demand.
"I don’t see peak [oil] demand happening in 10 years or even by 2040,” asserts Amin Nasser, president and CEO of Saudi Aramco, one of the largest companies in the world in terms of revenue. "There will continue to be growth in oil demand … We are the lowest cost producer and the last barrel will come from the region."
Saudis cite petrochemicals industry as major growth driver
Nasser maintains that while countries the UK, France and Germany may be transitioning towards a petrol ban, the petrochemicals market will continue to drive demand until at least 2050. The IEA agrees, with a recent analysis confirming that petrochemicals will account for more than a third of world oil demand growth until 2030, and almost half until 2050. Saudi Arabia also recently announced that its oil reserves are bigger than initially estimated, a development that will strengthen its goals to pump the world's last barrel of oil.
“This certification underscores why every barrel we produce is the most profitable in the world, and why we believe Saudi Aramco is the world’s most valuable company and indeed the world’s most important,” says Saudi Energy Minister Khalid al-Falih.
Low production costs set to bolster Saudi oil market
Low production costs of just US$4 a barrel will ensure Saudi Arabia can continue to maximise profits and extract every drop of its vast energy reserves, which are currently estimated at 268.5 billion barrels. This will help keep the market afloat until the late 2020s, when Saudi Arabia predicts the United States shale boom will peak and demand for OPEC crude will be revived.
Want to know more about the petrochemicals industry, which Saudi Arabia claims will drive demand for OPEC crude? Don't miss 'Detecting danger – the mission critical role of gas detectors and high precision calibration gas mixtures in the petrochemical industry.
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