OPEC Says Demand for Crude Oil will still be high through 2050

WPRLD, Oct. 9 – OPEC said trillions of dollars are required to explore and develop fossil fuels over the next 20 years to support increasing demand of Black gold.

Though the world is drifting away from the use of fossil fuel, it is important to note that, this products can not be completely replaced due to its importance in different sectors of the global economy

In its annual report on long-term energy trends, the Organization of the Petroleum Exporting Countries (OPEC) said the oil industry would need to invest some $14 trillion by 2045–roughly $2 trillion more than the group’s 2022 forecast–to provide energy security amid strong economic and population growth in the years ahead.

In a base-case scenario outlined in its World Oil Outlook, released Monday, the group said global demand for oil should rise to 106.1 million barrels a day by 2025, up from 99.6 million barrels a day in 2022. That represents 600,000 barrels a day more than what OPEC forecast a year ago. By 2045, demand is set to increase to 116 million barrels a day.

According to Dow Jones News Wire, OPEC also laid out two alternative scenarios, however. In one, it assumed a more accelerated uptake of renewable energy that could significantly drive down oil demand. In another scenario, It assumed a retreat in global efforts to reduce carbon emissions, which it said could boost economic growth and drive oil demand higher.

The organization is among a handful of groups that publishes closely-followed oil supply and demand forecasts. It includes many of the world’s largest oil producers–members pump about one of every three barrels the world produces.

The group has been typically more bullish than others about the continued use of oil. Last month, the International Energy Agency–which represents a group of oil consumer countries, including the U.S.– predicted that demand for all three major fossil fuels–oil, coal and natural gas–will peak this decade.

OPEC said Monday that investment in all forms of energy was required, including the vigorous development of renewable energy. It added that significant investment would be needed in technologies that can mitigate the release of carbon dioxide from hydrocarbon-based energy production.

By 2045, the organization said oil is expected to make up just under 30% of fuel usage, marginally lower than the 31.2% it forecast in 2022. Renewable energy–excluding hydropower and biomass–is expected to account for 11.7% of global demand by 2045, up sharply from the 2.7% that OPEC estimated in 2022.

OPEC said its forecast of global oil demand stems from its expectation of strong economic and population growth through the middle of the century. It forecasts the global population to rise by around 1.5 billion, to 9.5 billion by 2045. Global economic output, meanwhile, is expected to rise by 3% per year, to $270 trillion in 2045.

The group said it sees itself meeting much of the growing oil demand. Non-OPEC supply is expected to increase by 4.1 million barrels a day by 2045, to 69.9 million barrels a day, according to the organization’s new forecast. OPEC, meanwhile, will increase production by 11.9 million barrels a day to 46.1 million barrels a day. Such a rise would account for 40% of the world’s liquid hydrocarbon output, up from the 34% share OPEC said it maintains today.

In the first of the oil cartel’s alternative scenarios–described as the “advanced technology scenario” which assumes an accelerated rollout of renewable energy–primary energy demand would be 55 million barrels of oil equivalent a day lower than the group’s reference case. In this case, oil demand would stabilize at over 100 million barrels a day around 2035, then start to drop slightly towards 98 million barrels a day by 2045.

The second of its alternative scenarios–in which the developing world successfully pushed back on current lower-emissions policies and targets adopted by many countries–would assume a faster return to economic growth in these countries in the medium and long term, and see oil demand surpass 113 million barrels a day by 2030 and hit 122 million barrels a day in 2045, OPEC said.