OPEC's latest World Oil Outlook (WOO) report reinforces the idea that oil and gas are here to stay for the foreseeable future, predicting long-term global demand growth. The report highlights that despite moves towards carbon neutrality in some countries, the global need for oil is far from its peak.
Here are the 10 key takeaways from the report, according to Argus:
No peak in sight:OPEC Secretary General Haitham al-Ghais has confidently stated that “there is no peak oil on the horizon,” reflecting the organization’s long-term belief in continued oil and gas usage.
Steady growth:Global oil demand is expected to rise from 102.2 million barrels per day (b/d) in 2023 to 120 million b/d by 2050, according to OPEC’s predictions. This is the first time the WOO report includes forecasts extending to 2050.
Rising on-OECD demand:Most of the demand growth will come from non-OECD countries, which are expected to see a rise from 56.6 million b/d in 2023 to 84.6 million b/d by 2050, a 28 million b/d increase.
Key contributors:India will play a leading role, accounting for 8 million b/d of this growth, while China’s oil demand will increase by 2.5 million b/d, tempered by its push toward electric vehicles and slower economic growth.
Flat OECD demand:In contrast, oil demand within OECD countries is predicted to peak at 45.9 million b/d by 2030, and then steadily decline to 35.6 million b/d by 2050, reflecting the shift toward cleaner energy in developed economies.
Investment requirements:OPEC emphasizes the need for $17.5 trillion in investment by 2050 to meet growing oil demand. Of this, 81%, or $14.2 trillion, is expected to be invested in upstream activities like exploration and production.
Increasing global supply:To keep up with rising demand, global liquids supply is expected to reach 120.2 million b/d by 2050, up from 102 million b/d in 2023, with OPEC+ countries contributing 70% of this growth.
OPEC+ share of supply:OPEC+ countries are forecast to increase their share of the global oil supply from 49% in 2023 to 52% in 2050, strengthening their dominance in the oil market.
U.S. Oil production:U.S. oil production is expected to peak at 23 million b/d by 2030, after which it will slowly decline to 19.4 million b/d by 2050. This decline reflects the maturation of U.S. shale fields.
Contrasting views:OPEC’s optimistic forecast contrasts with the International Energy Agency (IEA), which predicts oil demand will peak in 2029 and begin to decline from the 2030s. OPEC’s stance reinforces the ongoing need for oil and gas in the global energy mix.
OPEC’s latest report highlights the continuing importance of oil in the global economy, especially in non-OECD regions, and underscores the need for long-term investments to support future demand. As energy transitions evolve, oil remains a cornerstone of the global energy mix for decades to come.
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