Analysis from Westwood Global Energy Group has revealed that ~55% of global oil and gas production and ~45% of consumption (as of 2020) is driven by just a handful of countries, including some of the world’s richest.
With the exception of Canada, top oil and gas producers US, Russia, Saudi Arabia and Iran and the largest consumers including the US, China, Russia, India and Iran all lack legally binding net zero commitments. The analysis highlights the disparity between energy transition ambitions and the need for pledges and policies to turn into legal commitments that can have a meaningful impact. This is further underscored by the reality that the IPCC, BP and the IEA’s net zero outlooks require a ~60% reduction in oil and gas demand to reach net zero.
Arindam Das, Head of Commercial Advisory at Westwood said the world is potentially at an inflection point and questioned how nations address the energy trilemma at a global and national level.
“While Western Europe’s leadership on climate issues is hugely important in driving change, it is the direction of demand for fossil fuels in the Americas and Asia that really matter,” Das said.
The Westwood official said there remains considerable uncertainty around the outcome of COP26 and the potential impact on the hydrocarbon industry and its prospects going forward.