Over the forecast period oil will continue to lose market share to natural gas primarily due to the continuing switch to natural gas and other types of fuel, particularly for power generation. Natural gas power plants have a competitive advantage as they tend to be less expensive to build and are more efficient than other means of power generation.
Gas is also much more environmentally friendly than other fuels.
However, oil is expected to maintain its role as the largest source of primary energy well into the next century. The transport sector, where oil does not face any significant competition from other energy sources, will be key in maintaining oils dominant position. Indeed the transportation sector is expected to be the fastest growing end-use market for oil in all regions. This trend is more pronounced for OECD countries where oil demand growth is generated almost entirely from the transport sector. The downturn was largely the result of structural changes.