The Organization of Petroleum Exporting Countries (OPEC) has predicted that global oil consumption is set to increase by 17.9 MMbpd, or roughly 18 per cent to 120.1 MMbpd by 2050.
The OPEC doubled down on forecasts that global oil demand will keep growing to the middle of the century.
World oil consumption is set to increase the Organization said in its annual long-term outlook. It raised estimates covering the next two decades from last year’s report.
Conversely, forecasts from BP Plc, trading giant Vitol Group, Goldman Sachs Group Inc., consultants Wood Mackenzie and the International Energy Agency all indicate that oil demand may stop growing within the next decade as the world shifts to electric vehicles and renewable energy.
The OPEC said its increasingly bullish outlook reflects that, in light of the 2022 energy shock, advanced economies are re-evaluating the transition from fossil fuels as they acknowledge “the need for energy security.” At the same time, developing nations are pushing for access to affordable fuels, according to the report, which was compiled by OPEC’s Vienna-based secretariat.
By 2030, world oil use will increase by 11.1 MMbpd to average 113.3 MMbpd, it forecast. That’s 1.3 MMbpd more than in last year’s outlook, which had raised estimates from the previous year.
India will be the single-biggest contributor to growth, adding 8 MMbpd by 2050, more than three times the increase projected for China, OPEC said. Petrochemicals, road transport and aviation will drive the global expansion, and by 2050, cars with internal combustion engines will still compose more than 70 per cent of the fleet.
The report predicted that OPEC and its allies will be able to keep increasing supplies through to 2050, holding their share of world total liquids supply broadly steady at 52 per cent. It said the notion of phasing out oil and gas was a “fantasy.”
Yet, in May, OPEC Secretary-General Haitham Al-Ghais formally participated in talks ahead of the COP29 conference in Baku, Azerbaijan, urging the oil industry to offer “solutions to the climate challenge.” The outlook assumes that emissions will be limited by a “rapid expansion” of projects to capture and store carbon dioxide.
Additionally, OPEC continues to project that demand will surge by 2 MMbpd this year, considerably more than expected by Wall Street giants like JPMorgan Chase & Co. and Citigroup Inc., and even at the upper end of the range anticipated by state-run giant, Saudi Aramco.
Some of the group’s member nations have shown a lack of confidence in its bullish assessment, choosing to delay the restart of halted production by two months until December amid concern that demand remains too fragile to absorb the extra barrels.