OPEC Predicts Strong Growth in World Oil Demand, Defying Peak Oil Forecasts
In a bold annual outlook, OPEC has revised its projections for global oil demand in the medium and long term, pointing to robust growth driven by emerging markets like India, Africa, and the Middle East. Contrary to predictions of a peak in oil consumption by other forecasters, OPEC foresees a prolonged period of rising demand, buoyed by factors such as slower adoption of electric vehicles and cleaner fuels.
During the launch of its 2024 World Oil Outlook in Brazil, OPEC Secretary General Haitham Al-Ghais emphasized the significance of developing economies with expanding populations, growing middle classes, and rapid urbanization as key drivers of future energy demand. Despite a brief disruption by a Greenpeace protester during Al-Ghais’ speech in Rio de Janeiro, OPEC remains steadfast in its outlook.
The organization anticipates a favorable environment for sustained oil consumption, providing a vital lifeline for its 12 member countries heavily reliant on oil revenue. OPEC is confident in its forecast, citing potential resistance to ambitious clean energy targets and the scaling back of electrification goals by major automakers as supporting evidence.
With a resolute tone, Al-Ghais asserted, “There is no peak oil demand on the horizon,” underscoring the importance of readiness in transitioning to new energy sources at a scale that is truly viable.
OPEC’s Ambitious Projections and Call for Increased Industry Investment
OPEC’s outlook extends to 2050, envisioning world oil demand reaching 118.9 million barrels per day by 2045 and expanding further to 120.1 million barrels per day by 2050. These figures starkly contrast with industry forecasts, with BP anticipating a peak in oil use by 2025 and Exxon Mobil projecting a relatively stable demand above 100 million barrels per day through 2050.
In a push for greater oil industry investment, OPEC emphasized the need for $17.4 trillion to be allocated by 2050, a significant increase from the previous estimate of $14 trillion required by 2045. Al-Ghais stressed the necessity for collaborative efforts among policymakers and stakeholders to foster an environment conducive to sustained investment in the sector.
Medium-Term Outlook and OPEC’s Economic Considerations
OPEC’s medium-term demand forecasts depict an optimistic scenario, with expectations of heightened economic activity as inflation subsides and central banks adjust interest rates. The organization foresees world demand reaching 111 million barrels per day in 2028 and climbing to 112.3 million barrels per day in 2029, reflecting an upward revision from previous projections.
A significant disparity emerges between OPEC’s 2029 forecast and that of the International Energy Agency (IEA), with OPEC envisioning a demand level exceeding 6 million barrels per day higher than the IEA’s estimate for the same year. This contrast underscores OPEC’s confidence in the resilience of oil demand despite evolving market dynamics.
Long-Term Perspective on Vehicle Trends and OPEC’s Market Influence
Looking ahead to 2050, OPEC envisions a substantial increase in global vehicle ownership, with an estimated 2.9 billion vehicles on the road, predominantly powered by combustion engines. Despite the growing popularity of electric vehicles, OPEC highlights persistent challenges such as infrastructure limitations, battery production capacity, and access to essential minerals that hinder the widespread adoption of electric mobility.
As OPEC and its allies, collectively known as OPEC+, navigate market dynamics, the report forecasts an increase in OPEC+’s share of the oil market to 52% by 2050, with US output peaking in 2030 and non-OPEC+ production following suit in the early 2030s. This strategic positioning reflects OPEC’s commitment to stabilizing the market and ensuring its continued relevance in the evolving energy landscape.