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Rystad Energy

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Prospect Of Peak Oil Demand Puts Cap On Total Global Oil Reserves

Exploration vessel Petronas

The 2020 release of Rystad Energy’s annual global energy outlook reveals that the Covid-19 downturn will expedite peak oil demand, putting a lid on exploration efforts in remote offshore areas and as a result reducing the world’s recoverable oil by around 282 billion barrels.

Global total expected remaining recoverable oil resources decrease to 1,903 billion barrels, 42% of which are in OPEC territory, with the remaining 58% located outside the alliance.

“Non-OPEC countries account for the lion’s share of “lost” recoverable resources with more than 260 billion barrels of undiscovered oil now more likely to be left untouched, especially in remote exploratory areas,” says Rystad Energy’s Head of Analysis, Per Magnus Nysveen.

OPEC countries are much more resilient to the current crisis and will only lose a fraction compared to their non-OPEC counterparts such as the US (-49 billion barrels) and Russia (-31 billion barrels).

“OPEC countries are expected to lose 21 billion barrels of reserves potential as the negative developments in Venezuela and Iran outweigh the increased strength and reserves potential of core OPEC countries in the Arab Gulf region,” Nysveen adds.

Rystad Energy releases its annual outlook following the publication of the BP Statistical Review to provide an independent, solid and clear comparison of how the year has changed the world’s energy landscape. Related: The Oil & Gas Sector Could Already Be In Terminal Decline

A few more regional takeaways


  • In the US we expect lower upstream activity in shale acreage, less exploration in the Gulf of Mexico, and a reduced number of licensing rounds on the Atlantic West Coast. In total, this decreases recoverable resources by 49 billion barrels.
  • Canada will likely see more high-cost oil sands reserves left in the ground (14 billion barrels) due to increased environmental, social, and governance (ESG) concerns.
  • Mexico will likely see reduced exploration for deepwater and shale oil reserves.
  • In Brazil, more pre-salt reserves will likely be left in the ground.
  • With no normalization in sight, Venezuela’s actual reserves potential falls further by 21 billion barrels.


  • Russia will see more of estimated Arctic offshore oil reserves left in the ground due to peak oil demand coming sooner, lowering oil reserves by 31 billion barrels.
  • Similarly, Norway will also have to leave more reserves in the ground in the Barents Sea, due to little exploratory success and the assumption that Covid-19 will bring peak oil demand sooner.


  • In Nigeria, after a decade-long debate on oil policy reforms, potential reserves are expected to fall further by 6 billion barrels.
  • With no imminent peace in sight in Libya, future production potential falls further by 4 billion barrels.
  • Despite positive news on oil policy reforms in Algeria, shale exploration potential is expected to fall by 7 billion barrels of oil.
  • In Angola, we forecast less deepwater exploration as peak oil demand comes sooner due to Covid-19.


  • As the clear winner of the OPEC+ agreement, Saudi Arabia is expected to add 25 billion barrels to future production potential despite peak oil coming sooner.


  • China’s proven reserves are revised lower due to increased drilling while the country’s shale exploration is expected to be reduced.
  • In Iran, the risk of prolonged sanctions reduces recoverable reserves potential by 18 billion barrels.
  • For Australia, we expect reduced exploration in new basins.

*All oil volumes refer to crude and lease condensate.

By Rystad Energy

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  • Mamdouh Salameh on June 18 2020 said:
    Rystad Energy’s annual global energy outlook has more to do with wishful thinking and far less with real research.

    Their claim that the Covid-19 downturn will expedite peak oil demand, putting a lid on exploration efforts in remote offshore areas and as a result reducing the world’s recoverable oil by around 282 billion barrels isn’t borne out by facts for the following reasons.

    The first is that the notion of a peak oil demand is a fallacy and the notion that the pandemic will expedite peak oil demand is an illusion based on a fallacy. Soon the pandemic will be history and global oil demand will surge beyond pre-pandemic levels triggering exploration for more oil in even remote places. A case in point is China. Within less than two months of exiting the lockdown, it was able to lift both its crude oil imports and its demand to 2019 levels despite a loss of an estimated 20% of its oil demand during the pandemic.

    The second reason is that the global oil industry will emerge much leaner from the pandemic and it will focus all its diminished financial resources on the core business that sustains it, namely oil and gas. This means that they will be spending a lot on exploration for new oil to sustain their business.

    The third reason is that despite the loss of an estimated 40%, global oil demand will amount this year to 98.34 million barrels a day (mbd) or a mere 3 mbd less than 2019 level of 101.34 mbd with projections indicating that 2021 global oil demand will more than match 2019 levels.

    The fourth reason is that the global oil industry and also the International Energy Agency (IEA) believe that peak oil demand is still years away. There was no ambiguity whatsoever when the CEOs of ExxonMobil and Shell the world’s two biggest supermajors recently made their positions on peak oil demand very clear. Darren Woods the chief executive of ExxonMobil declared that “the long-term fundamentals that drive our business have not changed." This was echoed by Shell’s CEO Ben Van Beurden who said that it is entirely legitimate to invest in oil and gas because the world demands it". "We have no choice."

    The fifth reason is that if advances in technology help raise the global average recovery factor (R/F) of 34%-35% by 1%, this adds 50 billion barrels of oil to current reserves without even drilling one new well.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

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