Oil just gained market share for the first time since 1999 – here’s why
Oil remained the world’s leading fuel in 2015, accounting for 32.9 per cent of global energy consumption, BP said in its benchmark industry report today.
The report found that prices for all fossil fuels fell in 2015. This led to adjustments in the energy markets including boosting demand for oil which gained market share for the first time since 1999.
Last year, when Brent oil prices fell by nearly 50 percent to $52 a barrel, reserves declined by only 0.1 per cent to 1,698bn barrels.
Spencer Dale, BP's chief economist, said: “Oil grew exceptionally strong because when price falls, demand increases. The big casualty last year was coal. We are seeing a shift in the fuel mix away from coal, driven a lot by environment issues.”
Read more: Re-shaping Shell: Oil giant to exit up to 10 countries
Coal remained the second largest fuel by market share (29.2 per cent), but it was the only fuel that lost global market share in 2015. Consumption fell by 1.8 per cent in 2015, well below the 10-year average annual growth of 2.1 per cent.
The review found that global demand for primary energy grew by only one per cent, significantly slower than the 10-year average. This was down to lower growth in Chinese energy consumption as the country shifts from an industrial to a service-driven economy. BP said growth in energy consumption was below the 10-year average for all regions except Europe and Eurasia.
Energy consumption in China grew 1.5 per cent in 2015, the slowest rate in almost 20 years. Despite this, China remained the world’s largest growth market for energy for a fifteenth consecutive year.
Crude oil prices recorded the largest annual decline on record in dollar terms, and the largest percentage decline since 1986.
While crude oil prices rose in early 2015 as global consumption rebounded, strong growth in OPEC production, particularly in Iraq and Saudi Arabia, caused prices to fall sharply later in the year.
Emissions of CO2 from energy consumption, that globally increased by just 0.1 per cent in 2015, were found to be the lowest in 25 years.