International Energy Agency (IEA) has published its 2024 World Energy Outlook, examining the impact of maritime chokepoint routes on global trade, and the transition to low-emissions fuels.
Key maritime trade routes and their importance
According to IEA, key maritime trade routes remain vital to the well-being of global oil and gas markets. This includes the safe passage of ships through passages such as the Strait of Malacca and the Strait of Hormuz. The Strait of Malacca is particularly important to oil and gas trade and is set to become even more so in the future, with oil volumes increasing from 24 mb/d today (55% of global oil trade) to 28 mb/d in the Stated Policies Scenario (STEPS), and LNG flows increasing from 70 billion cubic metres (bcm) in 2023 (12% of global LNG trade) to 140 bcm in 2050.
The significance of the Strait of Hormuz
Around 20% of global oil and LNG supplies also flow through the Strait of Hormuz today, a share that remains broadly constant in the STEPS. Any disruption in either of these straits could lead to supply shortages and price volatility. A complete closure of the Strait of Hormuz, while unlikely, would be particularly damaging because there are limited alternative routes to market and because it would block off the vast majority of OPEC spare capacity.
Decarbonisation targets in shipping
In shipping, International Maritime Organization (IMO) targets for decarbonisation play a central part in ammonia and hydrogen taking a 4% share of shipping energy demand by 2030 in the APS, with low-emissions methanol accounting for another 8% and bioenergy for a further 10%. The reduction in global oil demand in road transport also contributes to lower emissions from shipping by decreasing oil shipments. By 2030, lower global oil demand in the APS reduces energy demand from international oil tankers by 15%.
Growth of low-emissions fuel consumption
Low-emissions fuel consumption in the transport sector is set to rise by 30% in 2030 and more than double by 2050 from current levels in the STEPS. Bioenergy plays a significant role in this, particularly in shipping and aviation. In the APS, low-emissions fuels help avoid 550 million tonnes of carbon dioxide (Mt CO2) emissions in road transport by 2030, and additional bioenergy is used in subsequent years to meet announced pledges, mostly in aviation and shipping. Hydrogen and hydrogen-based fuels see substantial growth as they become more cost-competitive in this scenario, with levels of use rising from 7 petajoules (PJ) today to 900 PJ in 2030 and 13,500 PJ in 2050.
Future use of hydrogen and ammonia
Most of the hydrogen is used for road transport, and all of the ammonia is used in shipping. While low-emissions fuels are crucial to decarbonising challenging sectors like aviation and shipping, energy efficiency improvements remain vital, resulting in 2,100 PJ of avoided demand by 2030 in the STEPS and 2,600 PJ in the APS in non-road transport sub-sectors, mostly thanks to new and more efficient stock replacing older models.
