Royal Dutch Shell PLC chairman Jorma Ollila said on Friday that the oil business has become much more volatile than in the past, while overall demand for energy is expected to have doubled by 2050.
“The surging energy demand today and the geopolitical tensions really do make oil business much more volatile than it was the case in the past,” Ollila said during a conference at the University of St Gallen in Switzerland.
“The political uncertainty in the Middle East and North Africa, which we are now experiencing, is a typical example of short-term developments driving the volatility,” he added.
However, Ollila also highlighted the longer term combination of the growth in emerging economies, as well as the increase in the world’s population.
“In 2050 the energy demand is expected to be about twice or even more than was the global demand the beginning of this century,” he said.
On Thursday, the International Energy Agency cut its outlook for global oil demand this year by 190,000 barrels a day because of high prices and unexpectedly weak growth in rich countries.
The agency said it had trimmed its forecast for global oil demand growth this year because of “persistent high prices and weaker IMF GDP projections for advanced economies.”
It put total demand at 89.2 million barrels a day.
So far this year, the agency had constantly revised its estimates upward as recovery from the economic crisis broadened. The downward revision reflected mainly an easing of demand in North America where high prices were beginning to hit demand, the agency said.