The IEA has published a medium term forecast for the oil markets. Only part of the report is available for free here.
They expect much higher oil prices a couple of years from now because the recent phase of low prices led to a strong reduction in exploration investments in 2015 and 2016.
Excellent news, if true.
That’s obvious for the oil companies. They like high prices.
It’s also obvious for the climate. Every dollar price increase helps speeding up the transition to electric vehicles. In the report about this in the German “Die Welt” the author makes the point that this will help sell more electric vehicles in Germany.
Unfortunately, the IEA report assumes rising demand, passing 100 million barrels a day in 2019 and 104 by 2022. They only think that the oil industry will not be able to meet that rising demand. They don’t discuss the idea of limiting supply for climate policy reasons.
And the IEA track record is not exactly inspiring confidence. They were completely off base when discussing deployment of renewable energy.
Anyone in the oil industry reading this IEA report should rejoice in the fact that less exploration projects will lead to higher prices a couple of years from now. And they should draw the obvious conclusion, which is to listen to Anthony Hobley and Carbon Tracker and reduce those exploration investments even more.
It would lead to even higher prices. And to less CO2 emissions as well.