Latest news with #WorldOilOutlook2050
Forbes
3 days ago
- Business
- Forbes
Will Oil Demand Hit 123 Million Barrels Per Day By 2050 As OPEC Says?
(Photo: Bob Riha, Jr.) Earlier this month, the Organization of Petroleum Exporting Countries made yet another attempt to counter energy market chatter about oil demand peaking over the medium- to long-term. At its biennial international seminar in Vienna, Austria from July 9 to 10, the oil producers' group said there was ample evidence in the market for the long-term need for black gold. This need has now reached a point of definitiveness that no one is talking about peak oil demand any more if OPEC's World Oil Outlook 2050 - a fresh assessment report on emerging energy market trends - is to be believed. In the foreword of the report, published just before the conclusion of the seminar, OPEC Secretary General Haitham Al Ghais said: "There is no peak oil demand on the horizon," given that "oil underpins the global economy and is central to our daily lives." That said the producers' group actually cut its global oil demand forecasts for the next four years faced with lower growth in China, a spread of electric vehicles in key markets, and an uncertain macroeconomic climate in the OECD countries. However, it lifted its longer-term view. Crude Projections On Oil Demand That view is based on an assumption that oil will remain 'indispensable' in supporting the economic progress of developing countries, and ensuring the steady output of mission critical hard-to-abate sectors like heavy industry, aviation and haulage. As for the projection figures, the OPEC report forecast that oil demand will average 105 million barrels per day this year. It then expects demand to grow to average 106.3 million bpd in 2026, and then rise to 111.6 million bpd in 2029, and continue rising to as high as 123 million bpd by 2050. 'Despite a marginal decline in its share, oil is set to maintain the largest share in the energy mix in 2050, at just below 30%. The combined share of oil and gas is expected to stay above 50% between 2024 and 2050. At the same time, the share of other renewables in the energy mix increases to 13.5% in 2050, up by 10 percentage points from 2024,' the report noted further. India, along with other Asian nations, the Middle East and Africa, are set to be the 'primary sources of long-term oil demand growth.' Combined demand in these four regions is set to increase by 22.4 million bpd between 2024 and 2050, the OPEC report noted, with India alone adding 8.2 million bpd. 'China's oil demand is projected to increase by less than 2 million bpd over the same time horizon. Moreover, a large part of China's increase is expected to occur over the medium-term, with fewer demand changes expected for the rest of the forecast period.' Not Quite Some Say However, OPEC's long-term oil demand projections don't quite align with what a number of other commentators think. The International Energy Agency expects global oil demand to peak at 105.6 million bpd in 2029 before marginally declining as the end of the current decade approaches. Some in the industry also believe peak demand for oil is imminent this decade. Energy major BP said last year that it even may happen sooner than most people expect, including as early as this year under a specific set of circumstances, and given the rapid growth of renewable energy. Meanwhile, the Energy Institute's recent Statistical Review of World Energy 2025, a global report that was once compiled by BP until very recently, did not directly predict a peak, but noted that some regions and nations - especially China - are seeing a slowdown or plateau in oil demand. Given a 2050 horizon is more than two decades and a half away from now, predicting a peaking of oil demand or otherwise may have a direct corelation with the make-up of the global economy and varying regional productivity levels, boosted by digital tools, each year. Maxime Darmet, Senior Economist for U.S., France and the UK at Allianz Trade said: 'In the coming decades, global productivity will be shaped by the adoption of digital technologies such as artificial intelligence and the enhancements and efficiencies they bring. This will likely drive up energy consumption, but also the efficient usage of energy. Countries that take the lead here would steal a march on others.' The Allianz Trade economist believes given the time horizon when it comes to predicting energy consumption and which source would dominate 25 to 30 years from now will likely be a tricky guesstimate at best. 'Look at the turmoil the global economy is currently facing in the wake of U.S. tariffs slapped by President Donald Trump. Such developments can change the trajectory of demand (and supply) of most commodities however long or short that impact is. Oil is no exception.' Furthermore, if the future of productivity, and indeed the global economy, is digital and AI driven requiring hyperscale data centers, then many including the likes of the IEA, energy majors Shell and Chevron, believe natural gas will likely be the near- to longer-term energy source that benefits. Be that as it may, few dispute that hydrocarbons will be part of the global economy and its energy mix for a while yet. Just that oil - OPEC's preferred one - might not be as dominant a source as the producers' group expects and hopes it would be. Therefore, the debate over peak oil demand and when it will occur won't be settled just yet.
CNBC
10-07-2025
- Business
- CNBC
The three energy topics on everyone's lips at the OPEC seminar
OPEC says more than 1,000 ministers, CEOs, policymakers, analysts and journalists were invited to its biennial seminar to discuss key trends in the oil and gas markets and the green transition. Here were three of the main topics under discussion: Across speeches and interviews, OPEC ministers once more advocated for a dual-pronged approach to the green transition that still allows investment in hydrocarbons to avoid supply shortages while availabilities of renewables increase. "Oil and gas will remain essential. Particularly in transportation, in heavy industries, and in the development of the emerging economies," Saudi Prince and Energy Minister Abdulaziz bin Salman said during his special remarks on Wednesday. "It is encouraging to see that many countries are now taking a more pragmatic view of the transition, reassessing timeline, adjusting policies and reaffirming the role of hydrocarbon in supporting energy security and competitiveness." OPEC Secretary-General Haitham al-Ghais echoed this view in a Thursday interview with CNBC's Dan Murphy: "It does not make sense that the world does not invest in all sources of energy. We're going to need to invest in technologies to deal with the emissions and reducing the emissions," he said. Critics have questioned this approach — and OPEC member the UAE's step to host the U.N. COP climate conference in 2023 — as potential greenwashing and serving the interests of Middle Eastern nations that heavily depend oil revenues. Back in late 2021, then U.S. President Joe Biden called out OPEC+ producers Saudi Arabia and Russia – alongside the world's leading crude importer China – for not doing enough in the fight against climate change. Riyadh and Moscow have both previously pledged to reach net-zero greenhouse gas emissions by 2060, while Washington says it will hit that milestone by 2050. The White House has somewhat shifted gears under the second administration of Donald Trump, who staunchly champions "unleashing American energy" and has called for higher domestic oil output. OPEC's World Oil Outlook 2050 – a wider-spanning analysis than the group's Monthly Oil Market Report – was released Thursday, estimating oil demand will pick up by 18.2 million barrels of oil equivalent per day between 2024 and 2050, with India, the Middle East and Africa among key growth drivers. The combined share of oil and gas in the global energy mix is seen staying above 50% over the analysis period. Short-term demand has also been at the forefront of considerations for OPEC and its oil producing allies, known as OPEC+. Eight OPEC+ members — comprising heavyweight producers Russia and Saudi Arabia, alongside Algeria, Iraq, Kazakhstan, Kuwait, Oman and the United Arab Emirates — on July 5 cited "low oil inventories" and "a steady global economic outlook and current healthy market fundamentals" as the reasons for further accelerating the pace of unwinding a set of their voluntary production cuts and deciding to implement a 548,000 barrels-per-day hike in August. Speaking to reporters on Wednesday morning, UAE Energy Minister Suhail al-Mazrouei said "the market is deeper than what is perceived, in my judgement." He stressed that he had no concerns over a potential supply overhang as a result of the expedited production increases. "No, I'm not worried, because we do that balance every time we make a decision. And you can see that even with the increase … we haven't seen major build-ups in the inventories. Which means the market needed those barrels," he said. OPEC ministers renewed calls for additional investment in the oil and gas sector, to boost capacity levels that have dwindled amid lower oil prices and the ongoing green transition. OPEC's World Oil Outlook 2025 estimates that "reliably" supplying markets and offsetting natural declines at mature fields will require global oil investments of $18.2 trillion over 2025-2050. In its latest World Energy Investment report, the International Energy Agency forecast that lower oil prices and demand expectations would push oil investment down by 6% in 2025, in the first year-on-year decline since the Covid-19 pandemic in 2020 and the largest downtick since 2016. Global refinery investment this year is meanwhile expected to dip to its lowest in 10 years, according to the agency. "I have to also say that increase in demand, there should be also the appropriate actions in terms of investments. So, the production of oil and gas and the delivery – the infrastructure – needs investment. And this investment should be done today," Azeri Energy Minister Parviz Shahbazov said on a Wednesday panel. In that same conversation, UAE's al-Mazrouei added, "The reality today, we are losing – if you look at the world's spare capacity – that number is going down, year on year. Because more countries are now in the environment when they can't produce what they did last year." He admitted this was also the case among OPEC+ producers. Spare capacity has been both a boon of contention and prized leverage during quota negotiations, with some OPEC countries – such as Iraq, Kazakhstan and the UAE – previously vying for leeway to increase output in line with their higher capabilities. Speaking from the predominantly buy side, Indian Minister of Petroleum Hardeep Singh Puri told CNBC's Dan Murphy that "prices have to be stable and predictable, so that it is worth the while of the global consumer, as also not undermine the investment in the sector."
