OPEC raises long-term outlook for oil demand: Global oil consumption expected to increase by 16% in the next 20 years.

Despite global efforts to transition to clean energy, OPEC believes that the world will continue to rely on oil for a long time.

In its World Oil Outlook 2023 released on October 9th, OPEC pointed out that global oil consumption will increase by 16% in the next 20 years, reaching 116 million barrels per day in 2045, which is about 6 million barrels higher than previous forecasts.

OPEC believes that road transportation, petrochemicals, and aviation will drive the growth in oil consumption, with Asian countries being the main driving force behind the increase in oil demand.

The organization also raised its mid-term demand forecast for 2028, citing strong demand this year despite economic headwinds such as interest rate hikes:

Despite the uncertainties, the oil demand in 2023 has proven to be resilient.

OPEC stated that global demand will reach 110.2 million barrels per day in 2028, higher than the 102 million barrels per day in 2023. The organization predicts that oil usage in 2027 will reach 109 million barrels per day, higher than the estimated 106.9 million barrels per day in 2022.

When the COVID-19 pandemic hit global oil demand in 2020, OPEC lowered its oil demand forecast, believing that oil consumption would eventually slow down after years of growth.

With the recovery in oil usage, OPEC has once again raised its forecast.

In its report released in 2022, the organization projected that global oil demand would stabilize after 2035, but the latest outlook shows that oil consumption will increase by an additional 1.6 million barrels per day in the last 10 years of the forecast period.

However, global fossil fuel investments have significantly declined and permanent reductions have occurred after the impact of the COVID-19 pandemic.

Therefore, OPEC is calling for increased investment in oil. The organization believes that to meet its long-term oil demand forecast, the oil industry needs $14 trillion in investment, or an average of about $610 billion per year.

OPEC Secretary General Haitham Al Ghais called for increased investment in oil development, stating that providing these investments is "crucial" and beneficial for both producers and consumers:

The call to stop investing in new oil projects is misguided and could lead to energy and economic turmoil.

Other energy policies and goals are faltering due to cost and a more nuanced understanding of the scale of energy challenges, so the world should see that resistance to fossil fuels is misguided.

History is full of countless examples that should serve as a warning of what happens when policymakers fail to recognize the complexity of intertwined energy systems.

OPEC's viewpoint contrasts sharply with the predictions of the International Energy Agency (IEA).

Last month, the IEA stated that the world is currently at the "beginning of the end" of the fossil fuel era. The consumption of the three major fossil fuels will decline in the next decade due to the rapid growth of renewable energy and the widespread adoption of electric vehicles. The International Energy Agency (IEA) believes that as countries shift towards renewable energy and electric vehicles, the demand for fossil fuels will stabilize by the end of this decade. The report states that if governments want to achieve net-zero emissions goals and limit temperature rise to within 1.5 degrees Celsius, they must immediately stop investing in new oil projects.

On the other hand, OPEC believes that despite the rapid growth of electric vehicles, internal combustion engine vehicles will still dominate in the future. The organization predicts that by 2045, there will be 2.6 billion fuel-powered vehicles on the global roads, which is 1 billion more than in 2022.