RIYADH: The Organization of the Petroleum Exporting Countries on Monday predicted that crude demand would continue to grow in the next two decades.
Raising its global oil demand forecasts for the medium and long term, OPEC said $14 trillion of investment is needed to meet this demand even as renewable fuel use grows and more electric cars take to the road.
In its 2023 annual report, the oil producers’ group forecasts demand for crude to reach 116 million barrels per day by 2045 under its main scenario, a 16.5 percent increase from the 99.4 million bpd in 2022.
That is an increase of 6 million bpd from its estimate last year.
Oil demand has “the potential to be even higher,” said OPEC Secretary-General Haitham Al-Ghais.
“Recent developments have led the OPEC team to reassess just what each energy can deliver, with a focus on pragmatic and realistic options and solutions,” he wrote in the foreword to the report.
“Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos,” he added.
The OPEC chief said: “What is clear is that the world will continue to need more energy in the decades to come.”
According to OPEC, oil demand will be driven by emerging and developing nations, with India in pole position.
Meanwhile, it sees oil demand in member countries of the Organization for Economic Co-operation and Development declining from 2025.
In order to meet this demand OPEC says additional investment in fossil fuel production will be needed, putting the figure at $14 trillion by 2045, or roughly $610 billion per year.
“It is vital that these are made; it is beneficial for both producers and consumers,” said Al-Ghais.
Meanwhile, OPEC said it takes a “realistic approach” in its main forecast scenario.
“What is clear is that a sustainable energy and economic future for all requires all energy sources, all relevant technologies, unprecedented investment and collaboration, and with energy security, economic development and reducing emissions going hand-in-hand,” it said.
“There is no single solution to meet growing global energy needs,” it added.
In 2021, the International Energy Agency surprised the world and shocked oil exporting nations by calling for a halt in new investment in fossil fuel production to attain carbon neutrality by 2050.
IEA Executive Director Fatih Birol said last week that global coal, oil, and natural gas consumption may peak before 2030. The IEA advises industrialized countries and in 2021 said investors should halt new oil investments if the world wants to reach net-zero emissions by mid-century.
OPEC, meanwhile, noted that while advanced nations have set targets for expanding renewable and nuclear power to meet their energy security and sustainability goals, “these ambitious targets increasingly stand at odds with realities on the ground.”
It said the required investments to achieve these targets “are significantly lagging.”
OPEC elaborated two additional forecast scenarios.
One assumes fast expansion of renewables which sees global oil demand roughly stabilizing at its current level for the next decade before beginning a slow decline.
The other sees countries putting a priority on economic growth, resulting in an increase in global oil demand of 6.3 million bpd on top of the reference scenario.
OPEC also backed developing technological solutions to reduce emissions, such as carbon capture and storage. While the possibility of removing carbon from emissions appeals to industry, the technology is far from maturity.