In its World Oil Outlook (WOO) report released yesterday, the Organization of the Petroleum Exporting Countries (OPEC) revised its earlier prediction upward and predicted that between 2021 and 2045, the world’s oil demand will increase by 13 million barrels per day.
However, the cartel issued a warning that the longer-term supply picture was fraught with significant uncertainty due to “significant risks to the economic outlook, high inflation, energy policy goals being challenged by energy security issues, and questions regarding a perceived shortfall in upstream investment, all coupled with persisting and new geopolitical risks.”
The analysis projects that by 2045, oil demand would have increased from 96.9 million barrels per day in 2021 to 109.8 million barrels per day.
After 2024, however, the OECD’s oil demand will begin to decline, declining by 11 million barrels per day between 2021 and 2045. For the same period, it is anticipated that non-OECD demand will rise by 23.6 million barrels per day.
In particular, OPEC anticipates a sharp slowdown in the rate of oil demand growth over the longer term, with an average annual increase of just 200,000 b/d in 2030–35 and then “a rather protracted period of plateauing” after that. It projects global demand to be 108.3 million barrels per day in 2030, 109.5 million in 2035, 109.8 million in 2040, and 109.8 million in 2045.
Long term, with the global economy emerging from the COVID-19-induced crisis, the aviation and road transportation sectors are expected to develop by greater volumes, which is principally responsible for the projected increase in oil consumption. According to the survey, China is expected to experience the highest increase in demand over the next few years, followed by India.
The non-OPEC liquids production is expected to increase to 71.4 million barrels per day (b/d) in 2027 from 63.6 million in 2021, reach a peak of 72.4 million in 2030, and then begin to fall.
Over the next five years, it is anticipated that expansion in non-OPEC production will be led by the US, Brazil, Guyana, Canada, and Norway. Brazil and Guyana “are joined by Canada, Kazakhstan, and Qatar as the key sources of non-Opec liquids supply increases” once US supply reaches its peak in the late 2020s. based on the WOO.
According to OPEC, $12.1 trillion will be needed for oil investments between 2022 and 2045, with $9.5 trillion going toward upstream, $1.6 trillion going toward middle, and $1 trillion going toward downstream.
With upwardly updated demand predictions and projected cost inflation in the short- to medium-term more than balancing the forecast period being one year shorter, this is greater than the $11.8 trillion forecast for 2021–45 in last year’s WOO.
