OPEC Boosts Global Oil Demand Projections Amid Renewed Industry Tensions

he Organization of the Petroleum Exporting Countries (OPEC) announced an increase in its projections for both medium and long-term global oil demand, signaling a potential intensification of energy market dynamics.

by Faruk Imamovic
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OPEC Boosts Global Oil Demand Projections Amid Renewed Industry Tensions
© Getty Images News/Joe Raedle

The Organization of the Petroleum Exporting Countries (OPEC) announced an increase in its projections for both medium and long-term global oil demand, signaling a potential intensification of energy market dynamics.

A Hefty Price Tag for Future Oil Demand

OPEC's projection suggests the global oil sector will need an investment of an eye-watering $14 trillion to satisfy the anticipated surge in demand, despite the accelerating growth of renewable energy solutions.

This massive amount averages out to approximately $610 billion annually. OPEC emphasized the critical nature of these investments, asserting they would mutually benefit both producers and consumers in the energy realm. Drawing from its 2023 World Oil Outlook, the oil cartel predicts global demand to soar to 116 million barrels per day (bpd) by 2045, marking a significant rise from the 99.6 million bpd recorded in 2022.

This estimate surpasses last year's prediction by a substantial 6 million bpd. India, China, other Asian nations, Africa, and the Middle East are set to be the primary drivers propelling this leap in demand.

OPEC and IEA: A Rift in Energy Visions

The projections by OPEC starkly contrast with those of the International Energy Agency (IEA), sparking an ongoing debate and “war of words” concerning peak oil demand between these two giants in the energy world.

Furthermore, OPEC's medium-term forecasts show that global oil consumption could reach 110.2 million bpd by 2028, marking a considerable rise of 10.6 million bpd compared to 2022 levels. In the introductory note of the report, OPEC Secretary General Haitham al-Ghais emphasized a realistic reassessment of what each energy source could offer.

He added, “Calls to halt investments in new oil projects are misguided and could spiral into energy and economic chaos”. Al-Ghais further pointed out that ignoring the intricacies of the energy sector, as history has shown, can have tumultuous consequences.

In sum, as renewable energy technologies progress, OPEC's bolstered projections highlight the continued relevance and complexity of the global oil market. Policymakers and industry leaders are advised to consider the broader picture, including the potential repercussions of underestimating oil's future demand.

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