Transport and Covid-19: responses and resources

Oil Dependence: Is Transport Running Out of Affordable Fuel?

Roundtable 139

Oil consumption is increasingly concentrated in transport and relatively limited fluctuations in transport demand can have increasingly significant effects on oil prices. Oil prices rose to all time highs at the beginning of 2008, exceeding $100 a barrel for the first time since the 1979 oil crisis. The underlying driver was demand for oil from rapidly developing economies  and especially China, where transport accounts for  the largest part of oil consumption.

OPEC market power is increasing as production of conventional oil outside OPEC has reached a plateau. Oil from tar sands in Canada and elsewhere is available in very large quantities, and is competitive at sustained prices above $40 a barrel. But processing such oil doubles CO2 emissions on a well-to-wheels basis compared to using conventional oil to fuel transport.

This Round Table assesses the policy instruments available to address oil security and climate change and examines their interaction with measures to manage congestion and mitigate local air pollution. A number of incompatibilities and trade-offs  are identified underlining the importance of  integrated policy making.

This report includes an examination of the factors that drive oil prices in the short and long term and  a discussion of the outlook for oil supply.

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