OPEC boosts long-term outlook for oil demand driven by emerging global growth By Reuters

By Alex Lawler and Fabio Teixeira

LONDON/RIO DE JANEIRO (Reuters) – OPEC raised its forecast for medium- and long-term global oil demand in an annual outlook, citing growth led by India, Africa and the Middle East and a slower shift to electric vehicles and cleaner fuels.

The Organization of the Petroleum Exporting Countries, in its World Oil Outlook 2024 released on Tuesday, sees demand rising for a longer period than other forecasters such as BP (NYSE: ) and the International Energy Agency, which expect oil use to peak in this decade.

“Future energy demand is in the developing world due to growing population, middle class and urbanization,” OPEC Secretary-General Haitham Al Ghais said during the launch of the report in Brazil, a country with which the group is seeking to forge ties. tighter.

Al Ghais’ speech in Rio de Janeiro was briefly disrupted by a Greenpeace protester.

A longer period of rising consumption would be a boost for OPEC, whose 12 members depend on oil revenues. In support of its view, OPEC said it expected more pushback on “ambitious” clean energy targets and cited plans by several global automakers to scale back electrification targets.

“There is no peak oil demand on the horizon,” Al Ghais wrote in the report’s foreword.

“Over the past year, there has been further recognition that the world can only introduce new energy sources at scale when they are truly ready.”

OPEC expects global oil demand to reach 118.9 million barrels per day (bpd) by 2045, about 2.9 million bpd more than expected in last year’s report. The report released its timeline to 2050 and expects demand to reach 120.1 million bpd by then.

This is well above other 2050 forecasts in the industry. BP estimates that oil use will peak in 2025 and decline to 75 million bpd in 2050. Exxon Mobil (NYSE: ) expects oil demand to remain above 100 million bpd through 2050, similar to current levels.

OPEC called for more investment in the oil industry and said the sector needed $17.4 trillion to be spent by 2050, compared with $14 trillion needed by 2045 estimated last year.

“All policymakers and stakeholders must work together to ensure a climate conducive to long-term investment,” Al Ghais wrote.

FORECAST FOR 2029 HIGHER THAN IEA

OPEC also raised its medium-term demand forecast, citing a stronger economic backdrop than last year as inflationary pressure eases and central banks begin to cut interest rates.

Global demand in 2028 will reach 111 million bpd, OPEC said, and 112.3 million bpd in 2029. The figure for 2028 is 800,000 bpd up from last year’s forecast.

OPEC’s forecast for 2029 is more than 6 million bpd higher than that of the IEA, which said in June that demand would settle in 2029 at 105.6 million bpd. The gap is greater than the combined output of OPEC members Kuwait and the United Arab Emirates.

In 2020, OPEC reversed itself when the pandemic hit oil demand, saying consumption would stabilize in the late 2030s. It began raising forecasts again as oil use recovered.

By 2050, there will be 2.9 billion vehicles on the road, up 1.2 billion from 2023, OPEC forecasts. Despite the rise of electric vehicles, vehicles powered by a combustion engine will account for more than 70 percent of the global fleet in 2050, the report said.

“Electric vehicles are poised for greater market share, but obstacles remain, such as power grids, battery production capacity and access to critical minerals,” it said.

OPEC and its allies, known as OPEC+, are cutting supply to support the market. The report shows that OPEC+’s share of the oil market rises to 52% in 2050 from 49% in 2023 as US production peaks in 2030 and non-OPEC+ production in the early 2030s.