by Alex Lawler
LONDON (Reuters) – The Organization of the Petroleum Exporting Countries (OPEC) has revised upwards its forecasts for global oil demand in the medium and long term and estimates that $14 trillion in investment is needed to meet it, despite the development of renewable fuels and the increased use of electric vehicles.
OPEC’s predictions in its global oil outlook for this year contrast with those of other institutions, including the International Energy Agency (IEA), which estimate that demand could peak during this decade.
Sustained demand for oil for at least ten more years would be well received by OPEC, while the economy of its 13 members depends largely on revenues from crude extraction.
The organization maintains that oil should be part of the energy transition and welcomes the decisions of certain states and companies to put the brakes on the abandonment of fossil fuels.
“Recent developments have led the OPEC team to reassess what each energy can deliver, focusing on pragmatic and realistic options and solutions,” writes the Organization’s Secretary General, Haitham al Ghais, in the preface to the report.
“Calls to stop investment in new oil projects are misguided and could lead to energy and economic chaos,” he adds, estimating the necessary investments in the oil sector at 14,000 billion dollars until 2045 , compared to an estimate of $12.1 trillion last year.
Speaking in Riyadh during the presentation of the OPEC report, Haitham al Ghais stressed that climate action should not come at the expense of global energy security.
“Over the past year, what is clear is that we have seen people express concerns about the real costs and benefits of net zero targets,” he said.
“Some unfortunately continue to promote an extremely risky narrative of rejecting oil by talking about oil demand falling by almost 25 million barrels per day by 2030,” he added.
OPEC forecasts that global oil demand, driven by China, India, other countries in Asia, Africa and the Middle East, will reach 116 million barrels per day (bpd) by 2045, about 6 million bpd more than predicted in last year’s report.
IEA Executive Director Fatih Birol said last week that global consumption of coal, oil and natural gas could plateau before 2030.
ROBUST DEMAND THIS YEAR
OPEC also revised upwards its medium-term demand forecasts through 2028, anticipating robust demand this year despite headwinds such as interest rate hikes.
“Despite this outlook, oil demand has proven resilient in 2023,” the report reads.
Global demand in 2028 will reach 110.2 million bpd, says OPEC, compared to 102 million bpd this year, specifies the organization, which forecasts that oil use in 2027 will increase to 109 million bpd, compared to 106 .9 million bpd in the 2022 estimate.
While the 2022 version of the OPEC report predicted that global oil demand would peak after 2035, the latest outlook predicts that oil consumption will increase by another 1.6 million bpd in the ten years after that deadline. .
In 2045, there will be 2.6 billion vehicles on the roads across the world, a billion more than in 2022, according to OPEC forecasts. More than 72% of these vehicles will be powered by a combustion engine, although the share of electric vehicles will see the strongest growth, the organization estimates.
(Reporting Alex Lawler, with Maha El Dahan, French version Claude Chendjou, editing by Kate Entringer)
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