The Organisation of Petroleum Exporting Countries (OPEC) on Tuesday projected a growing global oil demand from mid-2030s to 108 million barrels per day (bpd), after which it might begin to fall from around 2045.
Making the disclosure in its 2021 World Oil Outlook (WOO), OPEC stated that it was continuing to see oil demand growing “strongly” in the short- and medium-term before demand plateaus in the long term.
According to the organisation, the fuel would continue to retain the largest share in the energy mix at 28 per cent in 2045, little changed from last year’s estimate and down by just 2 percentage points from its 2020 share.
The document indicated a modest change from last year’s estimates, rising to 103.6mn b/d in 2025 from 90.6mn b/d 2020, with long-term demand slightly lower at 108.2mn b/d in 2045 compared with 109.1mn b/d previously.
Cumulative investment requirements in the global oil sector amounts to $11.8 trillion over the 2021-2045 period, according to OPEC, of which upstream accounts for 80 per cent.
The OPEC document includes analysis of the industry’s various linkages and its shifting dynamics, providing insights into energy and oil demand, oil supply and refining, the global economy, policy and technology developments, demographic trends, environmental issues and sustainable development concerns.
In the foreword to the publication, OPEC Secretary General, Sanusi Barkindo, note that the past year has been one of continuing uncertainty related to the pandemic, but highlighted the benefits of the Declaration of Cooperation (DoC) production adjustments in bringing down inventory levels, and the market being buoyed by the rollout of vaccines and further global fiscal stimulus.
The year 2020 saw the largest ever global drop in energy and oil demand, but 2021 has witnessed a significant rebound as vaccines were rolled out, lockdowns were eased, mobility increased, economies opened up further, and fiscal and infrastructure packages were implemented.
“Total primary energy demand is set to expand by a robust 28 per cent in the period to 2045. All forms of energy will be needed to support the post-pandemic recovery in a sustainable way, balancing the needs of people in relation to their social welfare, the economy and the environment.
”Other renewables combining mainly solar, wind and geothermal energy – see the largest growth in both absolute and percentage terms, leading to a share over 10 per cent by 2045. Gas witnesses the second largest increase in absolute terms,” the document indicated.
Oil demand in road transportation would continue to dominate the sectoral breakdown, increasing by 6.3 mb/d over the forecast period, with the total vehicle fleet (passenger and commercial vehicles) set to expand by over 1.1 billion by 2045 to around 2.6 billion, OPEC said.
The long-term share of alternative fuelled vehicles in the total fleet was projected to reach a level of around 24 per cent in 2045, but conventional vehicles remain dominant, it added.
It highlighted that non-OPEC liquids supply was expected to continue its recovery and grow by 7.5 mb/d from its 2020 low to 70.4 mb/d in 2026, driven by US tight oil, as well as barrels from Brazil, Russia, Guyana, Canada and Kazakhstan.
The view from the OPEC contrasts with that of the International Energy Agency (IEA), which in a May report said investors should not fund new oil projects if the world wants to reach net zero emissions.
Oil use will rise by 1.7 million barrels per day in 2023 to 101.6 million bpd, OPEC said in the publication, adding to robust growth already predicted for 2021 and 2022 , and pushing demand back above the pre-pandemic 2019 rate.
“Energy and oil demand have picked up significantly in 2021 after the massive drop in 2020,” Barkindo wrote.
Emmanuel Addeh in Abuja
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