On September 24, OPEC announced that global oil demand will continue to increase through at least 2050. This assertion comes as the organization pushes back against environmental activists and policymakers aiming to reduce fossil fuel production and use. OPEC Secretary General Haitham al-Ghais stated in the World Oil Outlook report, “There is no peak demand on the horizon.” He projected that global demand for liquid fuels will rise from 102.2 million barrels per day (b/d) in 2023 to 120.1 million b/d by 2050, with potential for even higher figures.
Ghais emphasized that the notion of phasing out oil and gas is unrealistic. This year’s demand forecasts are more optimistic than last year’s projections, which estimated consumption would reach 116.0 million b/d by 2045. The new report raises that figure to 118.9 million b/d for 2045, marking a 2.5% increase. The growth in demand is expected to be driven largely by India, alongside other Asian economies, the Middle East, and Africa, which are projected to account for an increase of 22 million b/d from 2023 to 2050.
OPEC’s forecasts contrast sharply with views from other analysts, including those at the International Energy Agency (IEA). IEA Executive Director Fatih Birol stated on September 23 that he expects global oil demand growth to remain below 1 million b/d in the near future, primarily due to a slowdown in China’s economy. The IEA anticipates that fossil fuel use will peak before 2030 and will release its next long-term energy forecast in October.
OPEC argues that such predictions jeopardize global energy security by deterring essential investments in oil and gas production. The organization consists of 12 oil-exporting nations that heavily rely on oil revenues. Since 2017, OPEC has partnered with Russia and other producers in the OPEC+ alliance to manage the market through output quotas.
To meet demand by 2050, OPEC estimates that the industry will need $17.4 trillion in investments for upstream and downstream projects. Ghais stated, “A realistic view of demand growth expectations necessitates adequate investments in oil and gas, today, tomorrow, and for many decades into the future.”
The report also highlights the responsibilities of OPEC+ producers. Supply from outside the group is expected to grow by 1.2 million b/d annually through 2029, mainly driven by increases in the U.S., Brazil, and Canada. However, this non-OPEC+ supply is projected to peak at 59 million b/d in the early 2030s and decline to 57.3 million b/d by 2050.
In contrast, OPEC+ will need to increase its production from 50.3 million b/d in 2023 to 53.8 million b/d in 2029, and then surge to 62.9 million b/d by 2050. This means OPEC+ will grow its share of the global oil market from 49% in 2032 to 52% in 2050.
In January, Saudi Arabia’s energy ministry instructed state-owned Aramco to halt plans to raise production capacity from 12 million b/d to 13 million b/d. Meanwhile, the UAE’s ADNOC is nearing the completion of its expansion plans, aiming to boost production to 5 million b/d by 2027.
Currently, actual production is much lower, with Saudi Arabia limited to 8.99 million b/d and the UAE to 2.99 million b/d through at least November, according to OPEC+ agreements. In Africa, many member nations struggle with underinvestment, while countries like Russia, Iran, and Venezuela face heavy Western sanctions on their oil sectors. Iraq and Libya are also dealing with political instability, resulting in significant supply disruptions.
Some production increases are expected from OPEC+ member Kazakhstan and Brazil, which has signed a “charter of cooperation” with OPEC+ but is not a full member. OPEC’s decision to release its report in Brazil signals an effort to strengthen ties with the country.
Long-term investments in oil projects are complicated by uncertainties regarding the energy transition, volatile energy security, and sluggish prices. Ghais stressed the importance of collaboration among policymakers and stakeholders to create a favorable investment climate for both producers and consumers.
Azerbaijan, not an OPEC member but part of the wider OPEC+ group, will host the next UN Climate Change Conference (COP30). In the meantime, OPEC+ countries have implemented significant output cuts to stabilize prices amid weak economic indicators and increasing non-OPEC+ production.
The OPEC+ alliance is set to review its policies on October 2 at a meeting of the Joint Ministerial Monitoring Committee, with a full ministerial meeting scheduled for December 1 in Vienna. As of September 23, Platts assessed Dated Brent at $75.17 per barrel.
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