Opec's grip on oil market to return to 1970s levels

World oil prices remained close to the $100-per-barrel mark last night as BP said Opec was set to increase its share of global oil production to levels not seen since the oil shocks of the 1970s.

In the BP Energy Outlook 2030, the oil giant predicted that the producers' cartel would see its share rise to 46 per cent during the coming two decades – "a position not seen since 1977", just years after an Opec embargo triggered the oil crisis in 1973.

The projection came as US crude oil prices touched intra-day highs of around $91.8 per barrel, while ICE Brent futures for March rose to $98.6 per barrel at one point.

Prices have been rising steadily in recent weeks amid debate over whether or not Opec should to increase oil supplies. Earlier this month, Fatih Birol, the chief economist of the International Energy Agency (IEA), which speaks for the big oil consumers in the West, gave warning that prices were entering a danger zone and threatening the still-fragile global economic recovery.

This week, the IEA raised its oil-demand growth forecast for the year to 1.41 million barrels per day, lower than last year's jump in consumption, but higher than Opec's growth estimate of 1.23 million barrels per day.

The cartel, which decided against raising output at its last meeting in December, believes the world is well supplied, blaming the high prices on "technical matters" such as the recent disruption to the Alaskan route that supplies more than 10 per cent of US crude oil, and outages in the North Sea.

"Also the weak dollar and speculation have added to this, pushing oil prices higher, especially Brent," said Opec's secretary general, Abdalla Salem el-Badri. Recent reports have indicated that the oil trader Hetco has cornered 30 per cent of Brent market.

Despite the official line, however, the IEA suggested that Saudi Arabia, the cartel's most influential member, may have quietly raised output to temper higher oil prices.

Market sources were sceptical about the assessment, with one of the country's major buyers saying that they had not seen evidence of an increase in Saudi supplies. A recent survey also suggested that the kingdom's output was flat in December. Looking beyond the short-term picture, BP yesterday published its energy outlook for the next 20 years, predicting an increase in Opec's share of global oil production.

"At the same time oil – and gas – import dependency in the US is likely to fall to levels not seen since the 1990s because of improved fuel efficiency and the increased share of biofuels," the oil giant said.

BP's report also expects global consumption growth to be impacted by the higher oil prices seen in recent years and a gradual reduction of subsidies in oil-importing countries. Overall, China, India, Russia and Brazil are set to dominate the growth in energy demand, while the improvement in energy-efficiency measures "are set to accelerate".

In terms of the energy mix, BP said the growth in oil demand – seen at 0.6 per cent per year – is likely to lag behind natural gas, which is expected to be the fastest-growing fossil fuel with more than three times the projected growth rate of oil at 2.1 per cent.

"In percentage terms, oil demand is reduced the most in the power sector (minus 30 per cent) because this is the easiest oil to displace with gas or renewables and is the sector most likely to employ carbon pricing," BP's chief economist, Christof Ruehl, said.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Recruitment Genius: Mortgage Administrator

£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...

Day In a Page

Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests