When oil prices dropped drastically in 1986, analysts suggested that the pressure on demand was actually building up since 1974. Global demand that year was 58.6 million barrels a day (mbd) according to the BP Statistical Review, fell sharply the following year and then rose gradually to 60.4 mbd in 1986.

The losers in production terms were Opec members as, in the same period, their combined production fell from 29.7 mbd to 18.5 mbd. Similarly, oil’s share in global primary energy consumption fell from over 51 per cent to 41.

Oil was being quickly substituted by coal, gas and nuclear power where possible. Improvements in efficient energy use and changes in the economic structure of the industrial countries towards the service sector played a part as well. Opec was caught out by this trend on the one hand and by the persistent rise in non-Opec production on the other.

Because the trend was actually initiated by regulations within the industrial countries of the OECD, it has remained in place and has strengthened. The same policy to a large extent is being pursued by some countries outside of the OECD such that oil’s share as the world’ primary energy consumption was just 33 per cent in 2013.

The pressure on oil production in recent years is not just from this alone, but from within the oil supply chain as well. Analysts no longer talk about crude oil supply and demand, but about “liquids” supply and demand because a large portion is being replaced or substituted by condensate, natural gas liquids (NGL), biofuels such as ethanol and biodiesel, gas to liquids (GTL) and coal to liquids (CTL) and finally unconventional oil sands and tight oils.

According to the International Energy Agency’s 2013 report, ‘To satisfy growth in demand, unconventional oil (tight oil, oil sands and bitumen) are expected to contribute 10 mbd and natural gas liquids 5 mbd and conventional oil will lose 3 mbd as a result’ by 2035.

The resources outside conventional crude oil were only 6 mbd in 1990 but went on to 17.7 mbd in 2012. According to the IEA; they are projected to grow to 36 mbd in 2035. Therefore, conventional crude oil supply which grew by almost 10 mbd between 1990 and 2012 is expected to grow only by additional 2 mbd by 2035.

These numbers may become even more alarming in future reports.

Let us not forget that Opec’s condensates, NGLs and, of late, GTLs also place pressure on conventional crude oil supplies. These resources contributed 1.5 mbd in 1986 and are now 5.8 mbd and expected by the IEA to grow to 9.9 mbd by 2035 due to the advances in natural gas development production and use.

These quantities still remain outside any production ceiling agreement by Opec.

But as far as Opec producers are concerned, the picture may not be so promising in the short to medium term. The decline in oilfields’ production around the world, estimated on average to be around 6 per cent, and the probable peaking of tight oil production in the US — by around 2020 — is expected to open the way for Opec production to increase again to comfortable levels.

However, we are now in a new ball game due to the precipitous fall in crude oil prices by almost 50 per cent from their level in early June. If this continues for a long time, then all the above numbers will have to be revised sooner or later.

The development of unconventional oil may not go unhindered due to economic reasons of reduced investments coupled with the still widespread opposition by local residents and environmental groups. There are signs of reduced expectations from biofuels even at a higher oil price, and this will be strengthened by any extended fall. Even investments in oilfield development may slow as companies review their expectations.

After what happened at the last Opec conference in Vienna last month, it may be unrealistic to suggest it will reduce production seeing that the quest for market share by some important members is so entrenched. But I must suggest that Opec member countries review carefully their capacity expansion projects and defer some of them for better times to come, thus shortening the time for oil prices to recover.

The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.