Peak demand and oil's long-term trap
Fixating on the timing of a peak in oil demand is misplaced. Rather, the peak's significance is in shifting the paradigm, from perceived scarcity to perceived abundance. And it poses a problem for low-cost producers
The economic response would be to increase their output to capture value while they still could, pressing the advantage of cheaply extracted oil. But oil also carries a social cost in these countries. And the long-term oil price will therefore reflect not their marginal cost but the social one. That's the subtle argument of a new paper from the Oxford Institute for Energy Studies, written by Spencer Dale, BP's chief economist, and Bassam Fattouh, the institute's director. It's a compelling read. The notion of peak oil demand has been ubiquitous in the energy world's discourse over the past couple of years. The idea has lingered on during 2017, even as demand soared. If the oil-price rise of
Also in this section
21 April 2026
After overcoming a COVID-induced demand collapse with several years of successful market management, geopolitical events have conspired to provide the pact’s biggest test to date
21 April 2026
The regime’s policy of using nuclear ambiguity as a deterrent may have failed but it has realised it has other cards to play, while its neighbours are reappraising their approach to security
21 April 2026
As the global energy system undergoes a fundamental realignment, Algihaz Holdings has established itself as a critical player bridging conventional energy markets and the next generation of renewable infrastructure.
21 April 2026
The 25th WPC Energy Congress is taking place from 11-15 October 2026 at the Riyadh Front Exhibition & Conference Center.
