International Energy Agency says energy world is set to change significantly by 2030 based on policy settings alone
The International Energy Agency said that the “fraught situation in the Middle East comes 50 years after the oil shock” that led to the founding of the Paris-based IEA itself by the Organisation for Economic Cooperation and Development and the agency has just issued its mixed World Energy Outlook 2023.
The IEA said the instability facing Israel and its neighbours was creating further uncertainty for an “unsettled global economy that is feeling the effects of stubborn inflation and high borrowing costs” in 2023.
The WEO of 2023 highlights include one area of global energy markets, natural gas, that was hit particularly hard by the global energy crisis.
“Natural gas markets have been dominated by fears about security and price spikes after Russia cut supplies to Europe and market balances have remained precarious,” said the IEA.
“But an unprecedented surge in new LNG projects coming online from 2025 is set to add more than 250 billion cubic metres per year of new capacity by 2030, equivalent to around 45 percent of today’s total global LNG supply,” the report explained.
The strong rise in capacity is expected to ease prices and gas supply concerns, though also risks creating a supply glut, given that global gas demand growth has slowed considerably.
“As a result, Russia will have very limited opportunity to expand its customer base. Its share of internationally traded gas, which stood at 30 percent in 2021, is set to drop to half of that by 2030,” the IEA noted.
Variables
The IEA Outlook considered in detail a major variable for energy markets in the coming years.
“China, which has an outsize influence on global energy trends, is undergoing a major shift as its economy slows and undergoes structural changes,” said the IEA.
“China’s total energy demand is set to peak around the middle of this decade, the report projects, with continued dynamic growth in clean energy putting the country’s fossil fuel demand and emissions into decline,” the agency forecast.
The IEA also forecasts that there are set to be almost 10 times as many electric cars on the road and with renewable energy sources nearing half of the global power mix.
“The phenomenal rise of clean energy technologies such as solar, wind, electric cars and heat pumps is reshaping how we power everything from factories and vehicles to home appliances and heating systems,” it argued.
The WEO 2023 report describes an energy system in 2030 in which clean technologies play a significantly greater role than today.
It predicts that there will be three times as much investment going into new offshore wind projects than into new coal-fired and gas-fired power plants.
“All of those increases are based only on the current policy settings of governments around the world. If countries deliver on their national energy and climate pledges on time and in full, clean energy progress would move even faster,” it concluded.
Saudi Aramco doubles profits to $110Bln on oil surge and plans 50 percent rise in natural gas production
Saudi Arabian Oil Company (Aramco), the world’s largest seller of crude oil, reported that annual net income more than doubled to $110 billion and confirmed plans to boost natural gas output by 50 percent.
The ICE Futures Abu Dhabi exchange progresses to boost energy trading status of UAE’s LNG producer
Intercontinental Exchange, the leading global provider of trading platforms and clearing, said US bank Morgan Stanley and Co. had become the latest Exchange and Clearing member for ICE’s newest exchange, the ICE Futures Abu Dhabi (IFAD) platform in the United Arab Emirates.
The IFAD membership now stands at a total of 29 firms and banks, listed at the end.
IFAD launched trading at the end of March 2021 in ICE Murban Crude Oil Futures and 18 Murban-related cash settled derivatives and inter-commodity spreads, offering the market a broad range of ways to trade and hedge Murban crude oil.
Contracts traded on IFAD are cleared at ICE Clear Europe where they are cleared alongside ICE’s global energy futures platform covering oil, natural gas and the environmental complex, allowing customers to benefit from critical margin offsets to enhance capital efficiency.
Produced by Abu Dhabi National Oil Co. (ADNOC), Murban is the UAE’s largest crude by volume, with daily production capacity of up to 2 million barrels.
IFAD saw record open interest of 53,515 contracts on May 18, with 48,440 of that total in the ICE Murban Crude Oil futures contract.
A total of 282,692 contracts have traded since the launch, equivalent to 282 million barrels of Murban Crude oil.
This includes 275,507 ICE Murban Crude Oil futures contracts and 7,185 Murban-related cash settled derivatives, with 55 firms having traded on IFAD since the launch.
Average Daily Volume in Murban Crude Oil Futures is 7,210 contracts.
“All the key metrics you look for to judge the traction of a new benchmark in the market - volumes, open interest, number and range of participants, and the depth of the curve - are all increasing,” said Jamal Oulhadj, President of ICE Futures Abu Dhabi.
“This really reflects how the energy industry is utilizing its new ability to hedge forward price risk for Murban crude and contribute to the price formation process of Murban crude oil,” Oulhadj explained.
In addition to producing Murban crude, ADNOC is a growing natural developer, including unconventional gas projects as well as operating the liquefaction and LNG export plant on Das Island.
The pioneering Das Island plant shipped its first cargo in 1977 and produces about 6 million tonnes per annum of LNG as the oldest in the Arab world after Algeria’s Arzew plant.
The plant’s LNG Trains are essential parts of the national resources for storage and export operations and is currently the subject of a rejuvenation programme.
IFAD has 29 Exchange members and 22 Clearing members.
Clearing members stand behind all trades made through IFAD and cleared by ICE Clear Europe, whether it is for the account of a customer, member or their own account.
Murban futures are open for trading for 24 hours a day on Mondays and 22 hours a day Tuesdays to Fridays, with investors from jurisdictions including Abu Dhabi, the US, Singapore, the UK, Switzerland, the Netherlands, France, Norway, Australia, Japan and South Korea, able to trade on IFAD.
The 29 members are: ABN AMRO Clearing Bank; ABN AMRO Clearing Chicago LLC; ADM Investor Services International Ltd; ADM Investor Services; Advantage Futures; BNP Paribas; Banco Santander; Citigroup Global Markets; G.H. Financials Ltd; Goldman Sachs and Co; Goldman Sachs International; HSBC Bank Plc; J.P. Morgan Securities; Marex Financial; Mercuria International; Mizuho Securities USA; Morgan Stanley & Co.; Onyx Commodities Ltd; PVM Oil Futures Ltd; PVM Oil Futures Pte Ltd; Phillip Capital; R.J. O'Brien & Associates; Societe Generale International; StoneX Financial; TP ICAP Markets Ltd; Tower Research Capital Europe; Tullett Prebon (Europe) Ltd; Vercer Capital Markets Trading Ltd; Wedbush Securities.
