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IEA sees petrochemicals as biggest driver of global oil demand growth to 2050

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IEA sees petrochemicals as biggest driver of global oil demand growth to 2050

Petrochemicals are set to become the leading driver of global oil demand ahead of the trucking, aviation and shipping industries, according to an analysis Paris-based International Energy Agency released Oct. 5.

"Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves," IEA Executive Director Fatih Birol said. "Petrochemicals are one of the key blind spots in the global energy debate."

The IEA projects petrochemicals will account for 3.2 million barrels per day, or more than a third of the growth in global oil demand to 2030, and nearly 7 MMbbl/d, or nearly half of the global oil demand growth to 2050.

By contrast, the IEA expects the global shipping industry to account for 1.0 MMbbl/d of global oil demand growth to 2030 and the aviation and trucking industries to account for 1.7 MMbbl/d and 2.5 MMbbl/d, respectively.

The agency projects that the global petrochemical sector will also consume an additional 56 billion cubic meters of natural gas by 2030 and an additional 83 billion cubic meters by 2050.

"Petrochemicals are particularly important given how prevalent they are in everyday products," the IEA said. "They are also required to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles."

The IEA noted that demand growth for plastics, a key source of petrochemical demand, has outpaced that of all other bulk materials.

"Advanced economies currently use up to 20 times more plastic and up to 10 times more fertilizer than developing economies on a per capita basis, underscoring the huge potential for global growth," the IEA said.

The IEA expects that growth will outweigh efforts to curb consumption of single-use plastics and encourage recycling in developed economies.

The IEA noted that shale gas production growth has led the U.S., which now accounts for about 40% of the global ethane-based petrochemical production capacity, to once again become a low-cost center for petrochemicals production.

However, the IEA also said the Middle East remains the lowest-cost region for "many key petrochemicals" and is home to many petrochemical projects.