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The world could soon see a massive oil glut. Here’s why.
The world could have a glut of oil by the end of the decade because of rising production combined with declining demand as consumers and businesses switch to electric vehicles and renewable energy, according to a new report from the International Energy Agency.
The International Energy Agency said Wednesday that the world’s total oil supply capacity is expected to rise to about 114 million barrels a day by 2030, which the group said would amount to “staggering” 8 million barrels a day beyond projected demand.
That type of spare capacity hasn’t been seen outside the COVID-19 lockdowns of 2020, when economies across the world shut down as governments sought to stop the spread of the deadly virus, the IEA said. The extra capacity could have “significant consequences for oil markets,” ranging from the U.S. to OPEC member nations such as Saudi Arabia and Kuwait, it added.
“This report’s projections, based on the latest data, show a major supply surplus emerging this decade, suggesting that oil companies may want to make sure their business strategies and plans are prepared for the changes taking place,” said IEA Executive Director Fatih Birol in a statement.
Among the drivers for rising oil supplies are expectations that Americans and consumers in other developed nations will continue to shift to electric vehicles. Global sales of EVs could reach 40 million cars in 2030, with almost one in two new cars projected to be an EV at that time, the IEA forecasted.
Could gas prices decline?
It’s possible that an oversupply of oil could lead to a “lower price environment,” according to the IEA report. However, the analysis includes three projections for where oil prices could be in 2030, ranging from a high of more than $90 a barrel to a low of less than $60 a barrel within six years. Currently, oil is trading at about $82 a barrel.
Still, one expert cautioned against reading too much into the report.
“It’s a long-range outlook, so it could be way off, or very close, but I’m a bit more concerned with the slowdown in EV adoption and the tremendous costs for countries adopting EVs,” Patrick De Haan, head of petroleum analysis at GasBuddy, told CBS MoneyWatch in an email.
Cheaper gas prices might not materialize by 2030 because some refineries have shut down in the U.S. and Europe, and there are fewer plans to build new facilities given the shift into solar, wind and other renewable energy sources, he added.
“[T]he future is hazy when it comes to this potential impact to gasoline prices,” De Haan said. “We’ll still need refineries for some time, and if they shut down as the transition occurs, that could lead gas prices higher in the long run.”
In the short term, drivers are getting some near-term relief, as gas prices are now dropping across the nation due to weaker demand and lower oil prices. The average price for regular unleaded gas in the U.S. was $3.44 per gallon on Monday, down about 9 cents from a week ago and 14 cents from a year earlier, according to AAA.
President Biden approved the mobilization of another 500 active-duty troops to North Carolina to assist in the recovery efforts after the deadly and devastating Hurricane Helene.
“With a total of 1,500 troops now supplementing a robust on-the-ground effort – including more than 6,100 National Guardsmen and more than 7,000 Federal personnel – the Biden-Harris Administration is mobilizing all relevant resources to support families as they begin their road to rebuilding,” the White House said in a statement Sunday.
Mr. Biden previously announced that the federal government would cover “100%” of costs for debris removal and emergency protective measures in North Carolina for six months. The Biden administration has also released more than $137 million in federal funds – including $100 million in transportation funds for North Carolina to begin rebuilding damaged roads and bridges.
Mike Stewart / AP
More than 800 people unable to return home are staying in lodging provided through FEMA, and 22 shelters are still housing nearly 1,000 people as mobile feeding operations continue to help survivors.
“My Administration is sparing no resource to support families as they begin their road to rebuilding,” Biden said. “We will continue working hand-in-hand with local and state leaders – regardless of political party and no matter how long it takes.”
Earlier Sunday, North Carolina Sen. Thom Tills called for more resources to bolster the relief effort and likened the damage to Hurricane Katrina’s mark on Louisiana in 2005.
“The scope of this storm is more like Katrina,” he told CBS News’ Margaret Brennan on “Face the Nation with Margaret Brennan”. “It may look like a flood to the outside observer, but again, this is a landmass roughly the size of the state of Massachusetts, with damage distributed throughout. We have to get maximum resources on the ground immediately to finish rescue operations.”
Mr. Biden, Vice President Kamala Harris and former President Donald Trump have all traveled to some of the impacted regions.
Hurricane Helene caused catastrophic damage from Florida into the Appalachian mountains and killed more than 225 people across multiple states. That number includes 114 killed in North Carolina alone.
The White House said Mr. Biden has also been briefed on Hurricane Milton, which is forecast to make landfall in Florida’s Tampa Bay area as a major storm on Wednesday.
U.S. disaster relief chief blasts false claims about Helene response
Deanne Criswell, who leads the Federal Emergency Management Agency, said on Sunday that the recent false claims and conspiracy theories about the federal response to the storm are “demoralizing” aid workers.
“It’s frankly ridiculous, and just plain false. This kind of rhetoric is not helpful to people,” she said. “It’s really a shame that we’re putting politics ahead of helping people, and that’s what we’re here to do. We have had the complete support of the state,” she said, referring to North Carolina.
Joe Raedle/ Getty Images
Republicans, led by Trump, have helped foster a frenzy of misinformation over the past week among the communities most devastated by Helene, promoting a number of false claims, including that Washington is intentionally withholding aid to people in Republican areas.
Trump accused FEMA of spending all its money to help immigrants who are in the United States illegally, while other critics assert that the government spends too much on Israel, Ukraine and other foreign countries.
Tillis, a Republican, on Sunday rejected that claim, telling “Face the Nation with Margaret Brennan” that resources being used on immigration is “not yet … affecting the flow of resources to western North Carolina.”
Tillis said the stream of misinformation about relief efforts in North Carolina is a “distraction.”
“I believe that we have to stay focused on rescue operations, recovery operations, clearing operations, and we don’t need any of these distractions on the ground,” Tillis said. “It’s at the expense of hard-working first responders and people that are just trying to recover their lives.”
Mr. Biden said in a statement Sunday that his administration “will continue working hand-in-hand with local and state leaders –- regardless of political party and no matter how long it takes.”
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Biden sends more troops to North Carolina for continued Hurricane Helene response
Scene along Twin Cities Marathon: Bananas, Alan Page, pickle juice
Rep. Mike Turner says all “candidates need to deescalate” after Trump assassination attempts
Biden sends more troops to North Carolina for continued Hurricane Helene response
Scene along Twin Cities Marathon: Bananas, Alan Page, pickle juice