Global oil demand may surge in the next few years, creating a major headache for one of the world’s largest producers, according to former Shell Oil President John Hofmeister, who also expects robust global economic growth.
Continue Reading Below
“Global demand will continue to increase,” Hofmeister told FOX Business’ Stuart Varney on “Varney & Co.” on Thursday. “I think it may increase 1.5% per year over the next several years … that’s 1.5 million barrels per day and the decline rate of so many OPEC countries means that the Saudi’s are really going to try to hold it together for OPEC but they are not going to be able to.”
OPEC’s crude output improved in June mostly in Saudi Arabia, where production was increased by more than 400,000 barrels a day, according to the organization. This came after the group reached a deal in June to boost oil output after prices rallied to a 3.5-year high.
On Wednesday, oil prices slid after Libya announced exports would resume while OPEC lowered its 2019 demand forecast. But, in Hofmeister’s opinion, Saudi spigots will be capped.
“That’s what takes us out of poverty—that’s what brings prosperity to more than just the well-to-do,” he said.
Hofmeister added: “Oil will remain the center of economic capability and economic development for decades to come.”