OPEC hikes medium and long-term oil demand forecasts
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The news: The Organization of the Petroleum Exporting Countries (OPEC) has raised its medium and long-term forecasts for world oil demand, citing growth led by India, Africa and the Middle East and a slower shift to electric vehicles and cleaner fuels.
The numbers: In its World Oil Outlook report OPEC expects world oil demand to reach 118.9 million barrels per day (bpd) by 2045, around 2.9 million bpd higher than expected in last year's report. OPEC also extended its forecast timeline to 2050 and expects demand to hit 120.1 million bpd by then.
The group raised its medium-term demand forecasts, citing a stronger economic backdrop than last year as inflation pressure wanes and central banks start to lower interest rates.
World demand in 2028 will reach 111 million bpd, the report said, and 112.3 million bpd in 2029. The 2028 figure is up 800,000 bpd from last year's prediction, Reuters reported.
OPEC also expects there will be 2.9 billion vehicles on the road by 2050, up 1.2 billion from 2023. Despite electric vehicle growth, vehicles powered by a combustion engine will account for more than 70% of the global fleet in 2050, the report said.
The context: OPEC's 2029 forecast is more than 6 million bpd higher than that of the International Energy Agency (IEA), which said in June demand will plateau 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, when the pandemic hit oil demand, OPEC flagged that consumption would plateau in the late 2030s. However, the group has now started raising forecasts as oil use has recovered.
The report sees OPEC and its allies, known as OPEC+, growing its share of the oil market to 52% in 2050 from 49% in 2023 as US output peaks in 2030 and non-OPEC+ output levels off in the early 2030s.
OPEC said it expected more push back on "ambitious" clean energy targets, and cited plans by several global carmakers to scale down electrification goals.
"There is no peak oil demand on the horizon," OPEC secretary general Haitham Al Ghais wrote in the foreword to the report.
What they said: "Future energy demand is found in the developing world due to increasing populations, middle class and urbanization," said Al Ghais during the report's launch in Brazil.
The sources: Reuters, OPEC media release
