- OPEC anticipates oil and gas demand to continue rising until 2045 and climb to 116 million barrels daily.
- Climate action to reach net zero undermines investment in the oil sector and jeopardises global energy security.
The General Secretary of the Organisation of Petroleum Exporting Countries (OPEC), Haitham Al-Ghais, has criticised calls to halt investments in new oil projects, labelling it an extremely risky narrative. Amid contrasting views with the IEA, OPEC’s latest oil outlook expects global oil demand to rise until 2045, reaching 116 million barrels daily. According to him, climate action to reach net zero undermines investment in the oil sector and jeopardises global energy security. IEA has urged countries to stop new fossil fuel investments to reach net zero emissions by 2050. This is to achieve the Paris Agreement goal of sustaining global temperature rises below two degrees.
According to reports by Reuters, Al-Ghais considered this an extremely risky narrative, with OPEC instead hiking demand expectations in its latest annual oil outlook report. Speaking yesterday at the publication’s launch in Riyadh, Saudi Arabia, he said, “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.” This follows moves by OPEC and its allies, including Russia (OPEC+), to cut more than five million barrels daily out of global markets to prop up crude prices. Investors now fear supply shortages, helping to drive rallies across significant benchmarks.
Brent Crude and WTI Crude prices rose above 25 per cent last quarter. Both benchmarks are currently priced at $87.18 per barrel and $85.35 per barrel, respectively. OPEC has now raised its predictions for global oil demand over the medium term, estimating a rise from 102m to 110.2m barrels per day over the next five years. Meanwhile, they have ditched the expectations outlined in last year’s report of oil demand reaching a plateau after 2035.
Instead, OPEC anticipates demand to continue rising until 2045 and climb to 116m barrels per day. This translates to 6 million barrels per day, more than predicted last year. China, India, other Asian nations, and Africa and the Middle East will lead this demand growth. Its forecasts contrast with IEA predictions that coal, oil and natural gas consumption could peak before 2030. The firm also expects its total oil market share to rise from 34 per cent to 40 per cent by 2045. This includes an output from the world’s decline in the early 2030s.