The Opec cartel has increased its forecast of global oil demand in coming decades and claimed that stopping investment in new projects would herald “chaos”.
The cartel, whose members include Saudi Arabia, produces about a third of global oil supplies at present, in a market that used about 100 million barrels of oil a day last year.
In its annual World Oil Outlook report, Opec said it now believed that demand would keep growing for the next two decades, hitting 116 million barrels a day by 2045. That is about 6 million barrels a day more than it forecast a year ago, with growth driven by India, followed by China and other countries in Asia. Much of that growth will come this decade, it believes, with oil demand on course to hit 112 million barrels a day by 2030.
Haitham Al Ghais, Opec secretary-general, said that governments were “re-evaluating their sustainable energy pathways, taking into account the realities on the ground and the views of population”. There had been “pushback against the opinion that the world should see the back of fossil fuels, as policies and targets for other energies falter due to costs and a more nuanced understanding of the scale of the energy challenges”, he said.
The report comes after the International Energy Agency, the Paris-based organisation that counts Britain and America among its members, last month reiterated that no new oil or gas fields were needed if the world was to hit net-zero emissions by 2050, which is required to avoid the worst extremes of climate change. The IEA said that a net-zero-compliant scenario would see oil demand fall to 77 million barrels a day by 2030.
Al Ghais launched a thinly-veiled attack on the IEA’s analysis. “There are some who unfortunately continue to push the extremely risky narrative of dismissing oil, with talk of oil demand dropping by almost 25 million barrels per day by the year 2030, which is really only just six years from now, and also dangerous calls to stop investments in new oil projects,” he said. “We believe this can only lead to heightened volatility, which will hinder economic development and exacerbate energy poverty.”
The Opec secretary-general Haitham Al Ghais slammed “the extremely risky narrative of dismissing oil”
In the report he added: “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos. History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy’s interwoven complexities.”
Although the IEA says that oil demand will need to fall to meet net zero, its own projections show that on current trajectories demand will in fact grow to hit almost 106 million barrels a day by 2028, although it said that this would put “a peak of demand in sight”.
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