Oxford Institute for Energy Studies

The new issue of Oxford Institute for Energy Studies Oil Monthly, including our latest short-term oil market #outlook to 2025, is now available. 👉 Link: https://lnkd.in/da9U6d3Z 🔹 Our #Brent #price #forecast is unchanged at $85.4/b in 2024 and $78.6/b in 2025. Brent is currently testing the upper bound of this year’s $75/b and $85/b range on signs of tightening markets ahead of expectations of strengthening summer demand, as OPEC+ supply cuts help draw down stocks. Tempering expectations of tighter balances are concerns over cooling demand in China and slow progress in drawing down product stocks, which have pressured refining margins. This has prompted us to maintain our Brent price outlook unchanged from last month, with H2 prices forecast to average near $87/b, although #uncertainty over global oil demand has skewed the balance of price risks to the downside near $83/b. For 2025, the balance of risks is dictated by #OPEC+ delaying, pausing or reversing its planned production hikes should market weaknesses prevail. 🔹 The #oil #market is forecast at 700 kb/d deficit in 2024 and a 730 kb/d surplus in 2025, assuming OPEC+ output returns as planned. We continue to forecast the market deficit deepening in the second half of the year to average -1.4 mb/d, unchanged from last month. The market is expected to shift into sustained surpluses from 2Q25 onwards averaging 930 kb/d (2Q25-4Q25), assuming OPEC+ output returns as planned. 🔹 Our global #demand #growth forecast is maintained at 1.4 mb/d in both 2024 and 2025. We have revised slightly lower non-OECD demand growth to 1.35 mb/d in 2024, on weak Q2 data particularly in #China, as #OECD demand growth remained resilient. But despite the Q2 slowdown, we still expect global oil demand growth to gain pace in the second half of the year and average 1.9 mb/d. For 2025, the pace of global oil demand growth is now expected to marginally surpass 2024 at 1.45 mb/d. 🔹 Global oil #supply is forecast to grow 270 kb/d in 2024, 100 kb/d lower than last month’s forecast, and by 2.9 mb/d in 2025. The 2024 downgrade reflects strong OPEC+ output compliance in the first half of the year with total OPEC+ output in June falling to a 3-year low and producers potentially cutting further in Q3 to meet their pledged targets and/or compensate for overproduction. Total non-OPEC #crude and global liquids are forecast to grow 880 kb/d in 2024 and 1.5 mb/d in 2025.    #energy #energypolicy #oott

EU #methane regulation is now published in the Official Journal of the #EU. The regulation will enter into force on the 4th of August. 👉 Read Oxford Institute for Energy Studies Energy Insight on EU methane regulation:   https://lnkd.in/eVgsTkdt 👉 Listen to latest OIES #podcast on EU methane regulation: https://lnkd.in/e87ZEnBq The OIES Energy Insight and podcast present the best answers we have so far to three questions: 1️⃣ What are the major changes introduced by the Regulation for different types of operators and Member States? 2️⃣ What is not yet, but will need to be, included in the Regulation before it can be meaningfully implemented, specifically in relation to delegated and implementing acts? 3️⃣ Does the Regulation meet the expectations raised in the 2020 EU Methane strategy with regard to reducing emissions associated with fossil fuel imports? #eu #methane #methaneregulation #oil #gas #coal #mrv

The Hydrogen & Decarbonized Gas Package has been published in the EU's Official Journal today and will enter into force on the 3rd of August. Read Oxford Institute for Energy Studies recent paper by Katja Yafimava analyzing the Package and its implications for hydrogen and natural gas networks, examining in particular whether the new rules ensure flexibility and security of supply. 👉 Link to paper: https://lnkd.in/e_35hwaq   Key points 💠 The Package, together with the TEN-E Regulation, will constitute the new regulatory framework, governing construction of, and access to, hydrogen networks, and the re-purposing and de-commissioning of, and access to, natural gas networks in the EU. 💠 This paper analyses the impact of this framework on the existing natural gas networks and the emerging hydrogen network, and seeks to establish specifically whether its rules ensure flexibility and security of supply. 💠 The paper concludes that although regulatory flexibility is built into the framework by establishing a transition implementation period, allowing exemptions and derogations for existing and new hydrogen infrastructure, and enabling financial and regulatory support via a PCI/PMI status, it is far from certain to be sufficient to enable the EU hydrogen market to develop at scale. 💠 The framework also does not guarantee that phasing in hydrogen networks and phasing out natural gas networks – either through re-purposing or de-commissioning – will be carried out in a coordinated manner across the EU, without negatively affecting the security of natural gas supply. 💠 The framework appears to be built on the premise that the EU hydrogen market will develop fast and at scale but lacks a “safety cushion” as it does not guarantee the coordinated re-purposing of the natural gas networks that could still be needed should the hydrogen market roll-out be slower and more gradual. 💠 The framework could of course be adjusted and will continue to remain ‘work in progress’ at least until 2030 as more rules are established in the upcoming network codes in the 2020s, as the hydrogen market rolls out (or fails to do so).

New Oxford Institute for Energy Studies Podcast discusses EU Methane Regulation. 👉 Link to podcast: https://lnkd.in/ea69uGbr 👉 Link to related Energy Insight: https://lnkd.in/eVgsTkdt 🎙 In this latest OIES podcast from the Gas and Energy Transition Programmes James Henderson talks to Prof. Jonathan Stern and Maria Olczak about their latest Energy Insight ‘Analysing the EU Methane Regulation: what is changing, for whom and by when’. 🎙 This regulation introduces new rules for measurement-based Monitoring, Reporting, and Verification (MRV), Leak Detection and Repair (LDAR), and limits on routine venting and flaring across the oil, gas, and coal supply chains. 🎙 Moreover, the EU is the first jurisdiction to set methane-related requirements for fossil fuel imports, which will be implemented gradually from 2025 to 2030. 🎙 The podcast provides the background to the new rules, considers the key components of the regulation and what it means for the EU operators and EU exporters. 🎙 In addition the authors discuss their views on the impact on new and existing LNG contracts and what the response of exporters to the EU might be. All of our #podcasts are also available on #spotify and #applemusic #Coal #EUmethane #Gas #globalmethanepledge #importstandard #LNG #MethaneEmissions #MRV #Oil

New Oxford Institute for Energy Studies podcast discusses energy transition scenarios and the impact these may have on natural gas. 👉 Link to podcast: https://lnkd.in/eS9C9iKJ 👉 Link to presentation: https://lnkd.in/dTqTzJgv 🎙 In this latest OIES podcast from the Gas Programme James Henderson talks to Mike Fulwood about this latest work on Energy Transition Scenarios and their impact on Natural Gas. 🎙 The podcast starts by discussing the key methodologies that have been used to generate the OIES scenarios before moving on to describe the three key outputs from the modelling process – the Declared Policies Scenario, the Net Zero with CCS Scenario and the Fragmented Scenario. 🎙 Mike reviews the supply and demand outcomes for natural gas in each of the scenarios and looks at the contrasting impacts for specific regions and sectors. 🎙 Future trade flows and prices are also discussed, before the debate turns to the future of decarbonised gases such as hydrogen and the need for CCUS to play a critical role if natural gas is to remain as a core part of the energy system to 2050. #gas #lng #ccs #energytransition #scenarioanalysis #podcast

Latest Oxford Institute for Energy Studies paper from the OIES China Energy Programme discusses clean energy innovation in China and its wider implications on the energy transition and industrial competitiveness 👉 Link to paper: https://lnkd.in/ekh4vwjV 🎧 Also listen to the podcast: https://lnkd.in/ekwjrwJh Key points: 💠 Excess capacity in China is an issue. It's a challenge for Chinese manufacturers of litihium-ion batteries, electric vehicles and solar panels, and its a problem for many OECD countries, where industries are struggling to remain competitive. 💠 But the common narrative attributing China's edge to subsidies alone is wrong. 💠 This paper discusses the importance of subsidies as well as a raft of other support measures 💠More importantly, though, paper highlights the innovative and entrepreneurial forces in China and, critically, the importance of vertical integration and manufacturing clusters. 💠 China’s EV, battery, and solar firms are able to innovate and scale up output quickly in part because of the important role of vertical integration and manufacturing clusters. 👉 Visit OIES China Energy Research Programme: https://lnkd.in/dymKc3Q #china #innovation #verticalintegration #wind #solar #batteries #evs #clusters

New Oxford Institute for Energy Studies Energy Comment discusses Global Climate Diplomacy at the recent Bonn climate change conference and G7 meeting. 👉 Link to Energy Comment: https://lnkd.in/euC9fy4A Key Points: 💠 The Bonn Climate Conference, an annual event that occurs mid-way between the COPs that take place each November, was held between June 3-13. It was immediately followed by the G7 conference in Italy on June 13-15. 💠 Both provided an opportunity to gauge the state of global climate diplomacy and to identify the key issues that are going to dominate COP29 in Baku, starting on November 11. 💠 The Bonn conferences are not intended to deliver substantive results in their own right, with the discussions often being more procedural in nature and preparing the way for the more high-profile COP six months later but they give a good indication of the main agenda items and the key topics that remain contentious. 💠 This year the negotiators were looking to build on the results of the Global Stocktake (GST), which was at the heart of the COP28 conclusions, and to create a roadmap towards two imminent and important objectives: 1️⃣ The delivery of updated Nationally Determined Contributions (NDCs) by all countries in early 2025 2️⃣ The establishment of a New Collective Quantified Goal (NCQG) for the provision of finance by the developed countries to encourage investment in environmental projects in developing countries as part of a just energy transition. 💠 This Energy Comment argues that the outcome of the Bonn conference underlined the key issues and challenges facing the COP29 organisers. 💠 With new NDCs set to be presented in early 2025, the COP will need to underline the need for greater commitment to efforts on mitigation to reduce emissions. 💠 At the moment the world is clearly not on target to meet the interim goals towards net zero by 2050, and the November meeting will need to encourage countries to step up their commitments significantly. 💠However, the discussions in Bonn did not provide much confidence that this will occur in practice. One of the main reasons for this is the continuing disagreement over financing. #BonnClimateConference #climatediplomacy #climatefinance #cop29  #GlobalStocktake #lossanddamagefund #ndcs #climatechange #energytransition

New Oxford Institute for Energy Studies podcast discusses energy transition scenarios and the impact these may have on natural gas. 👉 Link to podcast: https://lnkd.in/eS9C9iKJ 👉 Link to presentation: https://lnkd.in/dTqTzJgv 🎙 In this latest OIES podcast from the Gas Programme James Henderson talks to Mike Fulwood about this latest work on Energy Transition Scenarios and their impact on Natural Gas. 🎙 The podcast starts by discussing the key methodologies that have been used to generate the OIES scenarios before moving on to describe the three key outputs from the modelling process – the Declared Policies Scenario, the Net Zero with CCS Scenario and the Fragmented Scenario. 🎙 Mike reviews the supply and demand outcomes for natural gas in each of the scenarios and looks at the contrasting impacts for specific regions and sectors. 🎙 Future trade flows and prices are also discussed, before the debate turns to the future of decarbonised gases such as hydrogen and the need for CCUS to play a critical role if natural gas is to remain as a core part of the energy system to 2050. 🎙 Finally, the emissions impact of the various scenarios is also reviewed in comparison with a Net Zero scenario. All of our #podcasts are also available on #spotify and #applemusic #biogas #Emissions #EnergyTransition #Gas #Gasprice #Hydrogen #scenariomodelling

🚨 In June, the OIES Gas Research Programme published a series of papers, podcasts and presentations on various aspects of  #gasmarkets and #energytransition: 📖  The Uniper-Gazprom Arbitration Ruling: Is the final curtain coming down on remaining long-term Russian gas supply contracts to Europe? 👉 https://lnkd.in/eSJ-2dw3 📖 Analysing the EU Methane Regulation: what is changing, for whom and by when? 👉 https://lnkd.in/eVgsTkdt 📖 Energy Transition Scenarios: Impact on Natural Gas 👉 https://lnkd.in/dTqTzJgv 📖 East Mediterranean Gas: a triangle of interdependencies 👉 https://lnkd.in/dBHHADzH 🎧 The outlook for LNG in Japan, Korea and Taiwan 👉 https://lnkd.in/e9fg8WFU ▶ For more information on the OIES Gas Research Programme, please contact Bill Farren-Price, Head of Gas Research, and visit our webpage: https://lnkd.in/drMwjnj ▶ Browse all Oxford Institute for Energy Studies publications on our website: https://lnkd.in/d9SU_x6

New presentation on the Implications of the US IRA on the Deployment of Low-Carbon Ammonia Technologies presented at this year's Oxford Institute for Energy Studies Hydrogen Sponsors' Meeting held in Oxford in June 👉 Link to hydrogen Day programme: https://lnkd.in/e6kyGuXR Key points: 💠 Under the US Inflation Reduction Act (IRA) framework, steam methane reforming (SMR) with carbon capture and storage (CCS) and biomass gasification (BH2S) are competitive against SMR. CCS benefits from market hedges tied to natural gas prices, while BH2S faces higher market risks and limitations due to biomass feedstock availability and cost. 💠 Low-carbon ammonia via electrolysis (AEC) is not competitive with SMR in the near term. Despite IRA support, it relies on cheap, renewable electricity and technological advancements for long-term improvement. It still underperforms compared to CCS and BH2S. 💠  Technological advancements and cost reductions improve AEC’s economics between 2026 and 2033. However, early deployment requires higher subsidies (e.g., higher than the 45V tax credit program). 💠  The IRA provides unprecedented support for AEC. Still, it underperforms from both private and public perspectives, with higher carbon abatement costs than CCS and BH2S. 💠 The interaction between the EU’s Carbon Border Adjustment Mechanism (CBAM) and IRA could significantly improve the economics of US-based low-carbon ammonia production, reducing the carbon abatement costs to decarbonise US ammonia production via CCS and BH2S. 💠 There is debate on the implications of renewable electricity and hydrogen production matching rules on carbon emissions. Monthly matching rules favour AEC’s economics, while hourly matching is less economically viable. Flexible Haber-Bosch processes are essential for the future of renewable ammonia production. #hydrogen #ammonia #greenhydrogen #greenammonia #inflationreductionact #ccs #cbam #lowcarbon #smr #decarbonisation