Plastics Will Be The Single Important Factor Driving Oil Growth

- Oct 15, 2018-

Fatih Birol, executive director of the International Energy Agency, recently pointed out in an interview with CNBC that petrochemical products such as plastics will become the most important factor driving demand for oil in the future.


“Every time we discuss oil demand, peak oil demand, and changes in the oil market, we often think that changes in the auto market have affected changes in oil demand, which is completely wrong,” Fatih Birol said.


“In the next 10-15 years, the most important factor driving the growth of global oil demand is petrochemicals such as plastics,” Fatih Birol stressed.


In a report released last week, the International Energy Agency pointed to rapid growth in emerging economies such as India and China, where demand for plastics and other petrochemicals is also growing.


At the same time, due to the surge in the number of new energy electric vehicles and the increasing efficiency of internal combustion engines, the demand for transportation oil is expected to slow down by 2050.


However, the International Energy Agency believes that this mitigation can be offset by the rapid increase in demand for oil from the demand for chemical products. Plastic bottles, various beauty products, fertilizers and explosives are inseparable from petrochemical products extracted from oil and natural gas raw materials.


Oil companies such as Exxon Mobil and Royal Dutch Shell are planning to invest in new petrochemical plants in the coming decades, betting on the explosive demand for plastics in emerging economies.


 “At present, the industry is actively promoting the sustainable production of petrochemical products. In recent years, many governments are striving to reduce pollution and carbon emissions, such as issuing plastic prohibitions or collecting taxes on disposable plastic bags. This may weaken the growth rate of oil. But there is no doubt that petrochemicals remain the single most important factor in future oil growth,” the International Energy Agency emphasized.