Refined oil demand to drop below 2019 levels in 29 years - IHS Markit

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Updated 13 September 2021
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Refined oil demand to drop below 2019 levels in 29 years - IHS Markit

  • Demand for refined oil products will peak in 2036
  • Energy transition has "accelerated" during Covid-19, says IHS Markit

Demand for refined oil is set to be lower in 2050 than it was in 2019 as consumers move away from fossil fuels, according to a new projection by US-based analytics company IHS Markit.

The organisation has for the first time adopted a base case scenario which will see consumption of global refined products - such as gasoline, jet fuel, diesel, fuel oils, and biofuels - fall compared to pre-pandemic levels.

In the scenario, demand for refined products will peak in 2036, growing by nearly 9 MMbd. It is then expected to decline by more than 5 MMbd to 2050 - to a total of 85.5 MMbd -, placing it below 2019 baseline levels.

Sandeep Sayal, vice president, oil markets and downstream refining at IHS Markit said energy transition has "accelerated" during Covid-19, due to consumer habits and a greater sense of urgency around climate change putting pressure on governments to offer financial backing for the decarbonisation of the industry.

Sayal said: “The new IHS Markit base case scenario is ambitious in terms of acknowledging energy transition goals.

“But it reflects a pragmatic and plausible approach to the implementation and timing of those goals, one that factors in economic recovery and demand growth in the medium term before there is a peak.”

He added: “However, some of the more accelerated scenarios that envision net zero emissions and dramatically lower oil demand stretch the limits of what is technologically and politically feasible and remain outside of the base case.”

Under the scenario, IHS Markit expects all sectors to be affected by the gradual dilution of the role that the traditional refinery plays in energy production as demand for fossil fuels lessens.

Road transportation will be impacted with more stringent fuel economy standards, as well as an anticipated increase in plug-in electric vehicle penetration (percent of on-road fleet) from less than one percent of the global on-road fleet today to above 44 percent by 2050.

In the marine sector, alternatives such as hydrogen and ammonia will reduce the share of traditional marine gasoil and heavy fuel oils to below 60p percent.

Biofuels blends will also penetrate demand sectors outside of motor fuels, reaching 15 percent of global jet fuel demand by 2050.

“This shift is already being reflected in supply-side investment,” said Sayal. “Refiners will have more diversified investment portfolios as product suppliers seek low-carbon solutions to meet overall demand.”

The findings are the product of the Refining and Product Markets Annual Strategic Workbook and are part of the research that form the crude oil, refined products, NGL and downstream outlook for the 2021 IHS Markit Energy and Climate Scenarios.

Prepared annually, the IHS Markit Energy and Climate Scenarios include three plausible and integrated long-term energy scenarios to 2050, built by country and sector using experts from across the IHS Markit economics, energy, automotive, agriculture, life sciences and maritime divisions.


Using space science to protect Saudi Arabia’s environment

Updated 02 January 2026
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Using space science to protect Saudi Arabia’s environment

  • Kingdom is harnessing satellite technology to forecast disasters, boost agriculture

RIYADH: Learning space science has delivered significant environmental benefits worldwide, helping many countries better understand and manage climate challenges. 

Saudi Arabia is now taking steps not only to explore the galaxy but also to invest in future generations who can apply space science to pressing environmental issues at home.

Last November, the Space Academy, part of the Saudi Space Agency, launched a series of seminars designed to enhance knowledge and develop skills in space science and technology, with a particular focus on Earth observation.

Running for nearly a month, the program formed part of a broader strategy to nurture national talent, raise scientific awareness, and build data capabilities that support innovation and research across the Kingdom.

Developing space sector can eventually help reduce some of the critical climate issues such as drought and air pollution. (AFP)

As efforts to strengthen the sector continue, important questions remain: How can space science translate into tangible environmental benefits? And how large is the global space economy?

In an interview with Arab News, Fahad Alhussain, co-founder of SeedFord, highlighted the scale of the opportunity and its environmental impact.

“To be frank, the slogan that we always use in space is that ‘saving the Earth from the space.’ It is all about this,” Alhusain told Arab News.

“You can recall a lot of related environmental issues like global warming, related to forests, related to the damage that happens to the environment. Without space, it would be almost impossible to see the magnitude of these damages.”

According to Alhussain, satellites have transformed how experts observe environmental changes on Earth, offering a comprehensive view that was previously impossible.

“By collecting data and using satellites… You can better analyze and measure so many things that help the environment,” said Fahad Alhussain. (Supplied)

He said that “the transformation of technology allows even the non-optical ways of measuring, assessing, and discovering what is going on in the environment … you can even anticipate fire before it happens in the forest.”

“You can detect the ice-melt down, you can get huge amount of information and can see it through the weather maps…there is a huge section in the economy for the environment,” Alhussain commented.

A 2022 report by Ryan Brukardt, a senior partner at McKinsey & Company, published by McKinsey Quarterly, found that more than 160 satellites currently monitor Earth to assess the impacts of global warming and detect activities such as illegal logging.

Brukardt cited NASA as an example of how advanced satellite tools are used to track environmental changes, including shifts in ocean conditions, cloud cover, and precipitation patterns. He also noted that satellite data can help governments determine when immediate action is needed, particularly in response to wildfires.

FASTFACT

Did You Know?

  • Satellites collect massive amounts of data, and AI is used to help interpret this information more efficiently and predict future outcomes.
  • The global space economy surpassed $600 billion in 2024 and is projected to exceed $1 trillion by 2030.
  • Saudi Arabia has established three key entities: the Supreme Space Council, the Saudi Space Agency, and the Communications, Space, and Technology Commission.

Beyond disaster response, satellites offer vital insights for agriculture. According to Brukardt’s report, scientists can use space-based data to monitor crop development and anticipate threats to harvests, such as drought or insect infestations.

These wide-ranging applications explain the rapid growth of the global space economy. 

According to World Economic Forum research, the sector is projected to reach $1.8 trillion by 2035, nearly tripling from $630 billion in 2023.

A deeper understanding of space and its applications offers Saudi Arabia, and the world, better tools to anticipate climate challenges, protect ecosystems, and safeguard biodiversity. (Supplied)

For Saudi Arabia, expanding space science capabilities could help address the country’s arid conditions by monitoring desertification and identifying sources of air pollution. Early detection of droughts, heatwaves, and crop stress could support more effective environmental planning and response.

Space-based data could also play a critical role in tracking environmental changes in the Red Sea and surrounding coastal ecosystems, strengthening marine conservation efforts and supporting the Sustainable Development Agenda.

As Alhussain emphasized, advancing knowledge in space science and satellite technology enables experts to measure environmental damage accurately and predict disasters before they occur, allowing for more effective responses.

By investing in space science education and research, the Kingdom can build national expertise, strengthen environmental protection policies, enhance food and water security, and contribute to global efforts to combat climate change—while also benefiting from the rapidly expanding space economy.

Ultimately, a deeper understanding of space and its applications offers Saudi Arabia, and the world, better tools to anticipate climate challenges, protect ecosystems, and safeguard biodiversity.

“By collecting data and using satellites, you can better analyze and measure so many things that help the environment,” said Alhussain.
“There will be patterns where you can warn people, scientists and decision makers to do something about it.”