The Organisation of Petroleum Exporting Countries (OPEC) has said that global oil demand will grow by 13 million bpd by 2045 compared to the 97 million bpd demand in 2021, to reach 110 million bpd.
According to the just-released long-term forecast of the OPEC World Oil Outlook (WOO), the overall growth will occur until 2025, while its plateau is predicted to begin from 2035.
“Overall growth will slow over the projected period, with virtually no increase after 2035, hinting to a relatively long period of plateauing oil demand at the global level,” the report said.
The report noted that some countries will increase their energy demand by 69 million bpd by 2045, with India alone accounting for 28 per cent of this growth.
It noted that by 2045, renewable energy sources , mostly wind and solar, will become the fastest growing types of energy resources in terms of demand.
Based on the outlook, OPEC said global primary energy demand was forecast to continue growing in the medium- and long-term, increasing by a significant 23 per cent in the period to 2045.
“The world needs to annually add on average 2.7 million barrels of oil equivalent a day to 2045, while all forms of energy will be needed to address future energy needs.
“Oil is expected to retain the largest share in the energy mix throughout the outlook period, accounting for almost a 29 per cent share in 2045.
“Other renewables – combining mainly solar, wind and geothermal energy – expand by 7.1 per cent p.a. on average, significantly faster than any other source of energy.
“All major fuel types will witness growth, with the exception of coal. Globally, oil demand is projected to increase from almost 97 million barrels a day (mb/d) in 2021 to around 110 mb/d in 2045,” OPEC revealed.
OPEC said the outlook indicated that India was set to be the largest contributor to incremental demand, adding around 6.3 mb/d to 2045.
The organisation added that global refining capacity additions were projected at 15.5 mb/d between 2022 and 2045 while global oil sector would need cumulative investment of $12.1 trillion in the upstream, midstream and downstream through to 2045, equating to over $500 billion each year.
Meanwhile, the cartel has said that excess supply in the oil market was the main reason for OPEC+ opting to cut production earlier this month, stating that there will be some surplus in the current quarter.
OPEC Secretary General, Haitham al Ghais told reporters at the Adipec energy conference in Abu Dhabi that the need to balance the oil market has always been the driving force behind its decisions.
“ We see a surplus in the fourth quarter. We also see a surplus in early parts of 2023 because of the great uncertainties surrounding the economic growth forecasts. That was the main reason we took the decision to be proactive,” he said.
On October 5, the OPEC and its partners — a 23-nation alliance led by Saudi Arabia and Russia — angered the US by announcing they would lower their output targets from November by 2 million barrels a day.
US President Joe Biden said there would be “consequences” for the Saudis. His top energy diplomat, Amos Hochstein, who also attended Adipec on Monday, has said there was no economic rationale for the cut.
Al Ghais said it was possible the global economy was already shrinking.
“Whether it will be severe or not is another issue. Europe is definitely in a recession; the US is potentially heading toward recession. These economic things will have impact on oil demand,” he noted.
