Rocketing demand for fossil fuels could deal blow to climate goals, report says

Demand for oil and gas has rebounded strongly as the global economy bounces back from the economic slowdown triggered by the Covid-19 pandemic in 2020, leading to a global gas supply crunch and rocketing energy market prices.

The international oil price climbed from lows of about $20 a barrel in April 2020 to seven-year highs of $90 a barrel on Wednesday, and may reach $100 by the end of the year. Meanwhile gas prices have reached all-time highs in markets across Europe and Asia, fuelling a cost of living crisis.

But the increase was unlikely to last over the lifetime of a long-term fossil fuel investment, Carbon Tracker said, because government climate commitments combined with the rapid switch to electric vehicles and renewable energy would drive down demand for oil sharply from the late 2020s to 2040.

The warning follows a call this week from Fatih Birol, the executive director of the International Energy Agency, for governments to triple their investment in low-carbon energy sources over the next decade to cut their reliance on gas as a safeguard against a future energy market crisis.