Oil will remain the fuel with the largest share in the energy mix by 2045 – OPEC

The Vienna-headquartered oil-producer group expects global energy demand to grow by 23% by 2045.

PHOTO: Flag of OPEC. Getty Images

In its World Oil Outlook 2023 report, the Organization of the Petroleum Exporting Countries (OPEC) has raised its global oil demand forecasts for the medium and long-term, and said the global oil sector will require an investment of $14 trillion by 2045 to meet the projected demand growth.

It expects world oil demand to reach 110.2 million b/d by 2028, “representing a strong increase of 10.6 million b/d compared to 2022.” The demand is forecast to grow further and reach 116 million b/d by 2045, an increase of 16.4 million b/d from 2022 and around 6 million b/d higher than its last year’s estimate.   

“What is clear is that the world will continue to need more energy in the decades to come as populations expand, economies grow, and given the pressing need to bring modern energy services to those who continue to go without,” said the group’s secretary general Haitham Al-Ghais.

OPEC expects non-OECD regions including India, China, other Asian nations, and some part of the Middle East to drive the energy demand over the outlook period. “Around 28% of non-OECD growth is expected to come from India alone,” OPEC said in its report. “At the same time, energy demand in OECD countries is set to marginally decline in the outlook period,” it added.

To retain a balance in the supply-demand dynamics in the global oil market, OPEC said a total investment of $14 trillion will be required by 2045, “or around $610 billion on average per year.”

“Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos,” Al-Ghais said. “History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy’s interwoven complexities,” he further added.

The group has been highly critical of any narrative that suggests oil demand would peak soon. Last month, OPEC called out the International Energy Agency (IEA) for endorsing the view that fossil fuel demand would peak before 2030 and criticized the Paris-based energy agency’s outlook as an “extremely risky” narrative.

Supply projections:

OPEC expects non-OPEC liquid fuel supply to grow from 65.8 million b/d in 2022 to 72.7 million b/d in 2028. The majority of this supply growth will come from the US, Brazil, Guyana, Canada, Qatar and Norway.

OPEC's liquid fuel production is projected to rise from 34.2 million b/d in 2022 to 37.7 million b/d in 2028, and further to 46.1 million b/d in 2045. “OPEC’s share of global liquids supply will rise from 34% in 2022 to 40% in 2045,” the group said.

In June this year, OPEC and its allies (OPEC+) announced they would extend the group's oil production cuts through 2024 to bring “balance” in the oil market. Additionally, OPEC’s de-facto leader Saudi Arabia pledged to voluntarily reduce its production by 1 million b/d until the end of this year. Russia also decided to cut its exports by 300,000 b/d until the end of 2023.

By Aparupa Mazumder 

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