State-owned oil companies could squander about $400 billion on investments in the next decade on new oil projects that will struggle to turn a profit as the world shifts away from fossil fuels, a non-governmental organisation said on Tuesday.

The Natural Resource Governance Institute (NRGI) estimated national oil companies, or NOCs, would invest $1.9 trillion in the next 10 years with about a fifth of those investments only breaking even if oil prices stay above $40 a barrel.

Oil prices have climbed to around $60 this week, after plunging below $20 last year when demand plummeted due to the coronavirus crisis. But the long-term outlook is weakening, as more analysts and energy firms see peak oil demand being reached sooner than the previous forecasts of the early 2030s.

-REUTERS