As we embark on another transformative year in the global energy sector, the echoes of 2023’s pivotal moments still resonate, setting the stage for a rollercoaster ride of disruptions, headwinds, and unprecedented opportunities in 2024. Rystad Energy, a leading authority in energy research and analysis, sheds light on the trends that will shape the industry this year.
With elections in over 70 countries impacting geopolitics, the oil market is set to witness unprecedented shifts. The outcome of political changes, such as the future of US support for Ukraine and EU climate policy ambitions, will inevitably sway oil markets. Jorge Leon, senior vice president, of oil market research, emphasises the crucial role geopolitics will play in shaping the industry.
Natural Gas: Balancing the Trilemma
In 2024, natural gas continues to be a linchpin in addressing the energy trilemma of security, affordability, and sustainability. Global gas production is projected to grow by 3%, supporting the energy transition, particularly in the power sector. Xi Nan, Senior Vice President of gas and LNG Market Research anticipates robust investments in LNG projects to sustain global demand.
The consolidation trend in the upstream oil and gas sector extends into the supply chain in 2024. With stable or falling interest rates, suppliers are poised to explore strategic acquisitions to augment capacity. Audun Martinsen, Rystad Energy’s head of supply chain research, foresees increased M&A activity in oilfield services and clean energy, optimizing efficiency amid peak activity in the oil and gas sector.
Clean Hydrogen Takes Flight
The clean hydrogen sector experiences a surge in activity, fueled by maturing policies and commercial-scale projects globally. Artem Abramov, head of cleantech research, anticipates completion of key feasibility studies, unlocking new use cases. The US is poised for a surge in project approvals, providing essential insights into pricing dynamics and technological advancements.
Solar and wind markets are set to break records in 2024, adding over 510 GW of capacity globally. Carlos Torres Diaz, Head of Renewables & Power Research, emphasizes the importance of government incentives to ensure continued momentum in renewable energy projects.
Evolving strategies in the US shale sector result in muted growth, sustaining elevated oil prices. Espen Erlingsen, head of upstream research, highlights that this shift enables OPEC to effectively regulate the market, potentially leading to extended periods of high oil prices.
Emergence of an OPEC+ in Refined Products Market
China’s downstream oil sector is undergoing a strategic shift, potentially leading to an OPEC+-like framework in the refined products market. Mukesh Sahdev, Head of Downstream, anticipates increased flexibility in China’s refining strategies, injecting volatility into crude procurement and product exports.
While challenges persist in offshore wind, authorities are supporting long-term goals with improved terms. Alexander Flotre, Vice President & Head of Offshore Wind, predicts sustained momentum in the energy transition journey, with governments emphasizing faster permitting and supply chain efficiency.
Coal Decline as Asian Growth Slows
Global coal-fired power generation is expected to decline in 2024, reflecting evolving Asian power grids. Steve Hulton, Head of Global Coal Industry Research, anticipates a small but significant 0.3% annual decline in coal generation, signaling a turning tide towards fossil-free alternatives.
As the energy landscape evolves, Rystad Energy stands at the forefront, guiding governments, organizations, and companies through the complexities and opportunities that lie ahead. For a deeper dive into the energy transition, join the upcoming webinar “Rystad Talks Energy” and stay informed about the transformative trends shaping 2024 and beyond.