ABU DHABI: OPEC raised its forecast for medium-to-long-term global oil demand in a yearly outlook released on Monday and said $12.1 trillion in investment is needed to meet that demand despite the energy transition .
The view of the Organization of the Petroleum Exporting Countries, in its World Oil Outlook 2022, contrasts with that of other forecasters who see oil demand plateauing before 2030 due to the boom in renewable energy and renewables. electric cars.
Another decade of oil demand growth would be a boost for OPEC, whose 13 members depend on oil revenues. The group argued that oil should be part of the energy transition and that investors’ focus on economic, social and governance (ESG) issues has deepened an investment gap.
“The overall investment figure for the oil sector is $12.1 trillion through 2045,” OPEC Secretary General Haitham Al Ghais wrote in the foreword to the report, which said that the figure was up from last year’s estimate.
“However, the chronic underinvestment in the global oil industry in recent years, due to industry downturns, the COVID-19 pandemic, as well as policies focused on ending funding for fossil fuel projects , is a major cause for concern.”
OPEC expected to stick to long-term oil demand hike
OPEC made a shift in 2020 when the pandemic hit demand, saying it would eventually slow after years of predicting steadily rising consumption. In the report, OPEC maintains its view that global demand will peak after 2035.
Other corporate and bank forecasts predict that oil demand will peak sooner.
The International Energy Agency said Thursday, for the first time in its modeling history, that demand for all fossil fuels is expected to peak, with demand for oil leveling off by the middle of the next decade.
Boosting demand for energy security
The report says global oil demand will reach 103 million barrels per day in 2023, up 2.7 million bpd from 2022. Total demand for 2023 is up 1.4 million bpd from to last year’s forecast.
OPEC also raised its medium-term demand forecast through 2027, saying the figure is up nearly 2 million bpd by the end of the period from a year ago.
He said the upward revision reflects a more robust recovery now seen in 2022 and 2023 and a “strong focus on energy security issues” leading to a slower substitution of oil with other fuels such as natural gas. , the price of which soared due to Russia’s invasion of Russia. Ukraine.
By 2030, OPEC projects average global demand of 108.3 million bpd, up from 2021, and raised its 2045 figure to 109.8 million bpd from 108.2 million bpd in 2021. The group had lowered the projection of 2045 in recent years.
OPEC and its allies, known as OPEC+, are again cutting supply to support the market. The report predicts that supply restraint will continue over the medium term, with OPEC production in 2027 lower than in 2022 as non-OPEC supply increases.
Still, OPEC is optimistic about its future prospects, seeing its market share increase. Tight crude supply in the United States is expected to peak after the late 2020s, rather than around 2030 last year.
“Oil is expected to remain the number one fuel in the global primary energy mix,” the report said.