OPEC, the Organisation of the Petroleum Exporting Countries, recently released its World Oil Outlook for 2024, forecasting an increase in world oil demand for the medium and long term. This growth is expected to be primarily driven by countries such as India, Africa, and the Middle East, as well as a slower transition to electric vehicles and cleaner fuels. Unlike other organizations like BP and the International Energy Agency, who predict oil usage to peak in this decade, OPEC foresees continued growth in oil consumption.
The longer period of rising consumption would benefit OPEC member countries who rely on oil income. OPEC supports its viewpoint by mentioning the expected resistance to ambitious clean energy goals and the scaling back of electrification plans by global carmakers. OPEC Secretary General Haitham Al Ghais emphasized that there is no peak oil demand in sight and highlighted the importance of transitioning to new energy sources when they are deemed ready on a large scale.
In its report, OPEC predicts that world oil demand could reach 118.9 million barrels per day by 2045, which is higher than previous estimates. The organization extended its forecast to 2050, projecting a demand of 120.1 million barrels per day by then. This projection far exceeds other industry forecasts, with BP expecting oil use to peak in 2025 and decline by 2050, while Exxon Mobil anticipates a consistent demand above 100 million barrels per day through 2050.
OPEC is advocating for increased investment in the oil industry, stating that $17.4 trillion needs to be invested by 2050, a significant increase from previous estimates. The organization emphasized the importance of collaboration among policymakers and stakeholders to create an investment-friendly environment. Additionally, OPEC raised its medium-term demand forecasts due to a more favorable economic environment and easing inflation pressures, positioning itself for continued growth in the oil market in the coming years.
By 2050, OPEC predicts that there will be a significant increase in the number of vehicles on the road, reaching 2.9 billion, with combustion engine-powered vehicles still dominating the global fleet at over 70%. Despite the growth of electric vehicles, challenges such as electricity grids, battery manufacturing capacity, and access to critical minerals remain. OPEC and its allies, collectively known as OPEC+, are adjusting supply levels to stabilize the market, with their share of the oil market expected to increase to 52% by 2050 as US and non-OPEC+ output peaks in the coming decades.
In conclusion, OPEC’s World Oil Outlook for 2024 suggests a positive outlook for the oil market, with continued growth in demand driven by emerging markets and slower adoption of electric vehicles. The organization’s forecasts for both medium and long-term oil demand are optimistic, projecting higher consumption figures compared to other industry estimates. As the world transitions towards cleaner energy sources, OPEC emphasizes the importance of sustained investment in the oil sector and collaboration among stakeholders to ensure a stable and secure energy future.
