OPEC: "Oil Demand Peak Not Reached... 18% Increase by 2050"

Impact of Population and Economic Growth in Non-OECD Countries
Oil to Account for 30% of Total Energy by 2050
Bloomberg: "Overly Bullish Oil Forecast"

The Organization of the Petroleum Exporting Countries (OPEC) has forecasted that global oil demand will increase over the next 20 years, with oil accounting for about 30% of total energy consumption.

According to the Wall Street Journal (WSJ) on the 24th (local time), OPEC stated in its annual report that oil demand is expected to rise by approximately 17.5%, from an average of 102.2 million barrels per day last year to 120.1 million barrels per day by 2050.

This outlook contrasts with that of the International Energy Agency (IEA). In June, the IEA predicted that the growth rate of oil demand would peak in 2029 and that daily demand would fall to 105.4 million barrels by 2030. OPEC estimates that daily oil demand will reach 112.3 million barrels in 2029.

OPEC also stated that to meet this demand increase, a total investment of $17.4 trillion (approximately 23,088 trillion KRW) will be required by 2050, averaging $640 billion (about 849 trillion KRW) annually. OPEC noted, "The peak in oil demand will not come in the near future."

[Image source=Reuters Yonhap News]

The forecasted increase in oil demand is based on projections of population and economic growth. OPEC expects the global population to grow from about 8 billion currently to 9.7 billion by 2050, mainly due to population growth in non-Organization for Economic Cooperation and Development (non-OECD) countries. Additionally, the global economy is predicted to grow at an average annual rate of 2.9% until 2050, with non-OECD countries expected to grow at an average annual rate of 3.7%. Accordingly, oil consumption in non-OECD countries is projected to increase by 28 million barrels per day by 2050, while consumption in OECD countries is expected to decrease by about 10%.

OPEC+ (the alliance of OPEC and major oil-producing countries) supply is forecasted to rise from 50.3 million barrels per day last year to 62.9 million barrels per day by 2050. Supply from non-OPEC+ countries is expected to decline from 51.7 million barrels per day last year to 57.3 million barrels per day in 2050. OPEC+'s share of global oil supply is projected to increase from 49% last year to 52% in 2050.

Despite recent expansions in clean energy investments by various countries, OPEC believes that oil and gas will remain central to energy supply through the middle of this century. The share of oil and gas in total energy sources is expected to exceed half. In particular, oil is anticipated to account for about 29.3%, with most of the demand growth coming from the petrochemical, transportation, and aviation sectors.

OPEC emphasized that while the world should invest in technologies such as carbon capture and hydrogen to reduce carbon emissions and improve efficiency, climate change measures should not come at the expense of global energy security.

However, OPEC's report has been criticized for being overly bullish on oil. OPEC projected that oil demand will surge by 2 million barrels per day this year, which is significantly higher than estimates by JP Morgan and Citigroup. This figure is close to the upper limit of Saudi Arabia's Aramco forecast range (1.6 to 2 million barrels per day), the world's largest crude oil exporter.

Bloomberg News pointed out, "The credibility of OPEC's long-term forecasts is diminished by such short-term predictions," adding, "Even OPEC member countries lack confidence in the bullish oil assessment. Concerns remain that demand is still vulnerable to absorbing additional production, and OPEC+ has decided to delay the October production increase by two months."

This content was produced with the assistance of AI translation services.