BP cuts oil demand outlook on Ukraine war | Business

The worldwide transition away from fossil fuels could be accelerated by the Ukraine-Russia war, British energy giant BP forecast on Monday.

Its assessment in the group’s annual energy outlook comes as oil and gas majors seek to reinvent themselves as greener companies by investing in renewables.

“The increased focus on energy security as a result of the Russia-Ukraine war has the potential to accelerate the energy transition,” BP said in its report.

This “as countries seek to increase access to domestically produced energy, much of which is likely to come from renewables and other non-fossil fuels”, it added.

BP forecast worldwide energy consumption to drop 2.3 percent by 2035 compared with its forecast a year ago, owing to falls for both oil and gas demand caused additionally by economic weakness.

BP stressed, however, that “oil continues to play a major role in the global energy system for the next 15-20 years”.

Under its most optimistic scenario, the firm sees carbon dioxide emissions peaking this decade, and dropping 30 percent from 2019 levels by 2050.

Reacting to the report, Philip Evans, climate campaigner for Greenpeace UK, welcomed BP’s expectations of greater moves towards the use of renewables.

“But the main message of these scenarios, and all credible energy scenarios, is that the world is not even close to meeting the targets” set out by the Paris Agreement on cutting carbon emissions.

The 2015 Paris Agreement seeks to limit global warming to 1.5 degrees Celsius and reach net zero emissions by mid-century.

“We urgently need greater intervention and investment from government to catch up with our rapidly changing climate,” he told AFP.

Evans said that meant “ruling out new oil and gas production”.