LONDON/RIO DE JANEIRO: The Organization of the Petroleum Exporting Countries (OPEC) raised its medium- and long-term forecasts for global oil demand in its annual outlook, citing growth led by India, Africa and the Middle East and a slowing transition to electric vehicles and clean fuels.
In its World Oil Outlook 2024 released on Tuesday, the group predicts demand will grow for a longer period than other forecasters, including BP and the International Energy Agency, which see oil use peaking this decade.
“Future energy demand will come from developing countries, driven by population growth, the middle class and urbanization,” OPEC Secretary-General Haitham Al-Ghaith said at the report’s launch in Brazil, where the group is seeking to build closer ties.
Al Ghaith’s speech in Rio de Janeiro was briefly disrupted by Greenpeace protesters.
A longer period of rising consumption would be a boon for OPEC, the 12-nation oil-reliant group that backed up its view by predicting greater opposition to its “ambitious” clean-energy targets and citing plans by several global automakers to scale back their electrification targets.
“Peak oil demand is not expected to arrive in the near future,” Al Ghaith wrote in the report’s foreword.
“The past year has further strengthened our realization that the world can only gradually introduce new energy sources at scale when it is truly ready.”
OPEC now expects global oil demand to reach 118.9 million barrels per day by 2045, about 2.9 million barrels more than projected in last year’s report, which provides a timeline to 2050, at which point it expects demand to reach 120.1 million barrels per day.
That’s well above other industry projections for 2050. BP projects oil use will peak in 2025 before falling to 75 million bpd by 2050. ExxonMobil expects oil demand to remain similar to current levels at just over 100 million bpd through 2050.
OPEC has called for more investment in the oil industry, saying the sector needs $17.4 trillion in investment by 2050. That’s significantly more than the $14 trillion it estimated last year would be needed by 2045.
“All policymakers and stakeholders need to work together to ensure a long-term investment-friendly environment,” Algais wrote.
OPEC wants more investment in the oil industry. Shutterstock
2029 forecast is higher than IEA
OPEC also raised its medium-term demand forecast, saying the economic environment is more favorable than last year, with inflationary pressures easing and central banks starting to cut interest rates.
OPEC says global demand is expected to reach 111 million bpd in 2028 and 112.3 million bpd in 2029. The 2028 figure is 800,000 bpd higher than last year’s forecast.
OPEC’s 2029 forecast is more than 6 million bpd higher than the IEA’s, which in June projected demand would plateau at 105.6 million bpd in 2029. The difference is bigger than the combined production of OPEC members Kuwait and the UAE.
When the pandemic hit oil demand in 2020, OPEC reversed course and predicted consumption would plateau in the late 2030s. As oil use recovers, OPEC has started to raise its forecast again.
OPEC predicts that there will be 2.9 billion cars on the road by 2050, 1.2 billion more than in 2023. Despite the rise in electric vehicles, cars powered by internal combustion engines will account for more than 70 percent of the world’s vehicles in 2050, the report said.
“Electric vehicles are poised to capture a larger market share, but obstacles remain, including the power grid, battery manufacturing capacity and access to critical minerals,” the company said.
OPEC and its allies, OPEC+, have been cutting supply to support the market. The report projects that OPEC+’s share of the oil market will rise from 49% in 2023 to 52% in 2050, as U.S. production peaks in 2030 and non-OPEC+ production peaks in the early 2030s.