The Organization of the Petroleum Exporting Countries (OPEC) on Thursday released an updated forecast for 2050 which anticipated soaring demand for oil in the medium and long term once China’s economic outlook improves.
According to OPEC’s World Oil Outlook 2050 report, oil demand will rise from 103.7 million barrels per day (bpd) in 2024, to 113.3 million bpd by 2030, and 123 million bpd by 2050 — a net increase of about 19 percent over the next 25 years.
OPEC anticipates demand for other forms of energy to increase as well, reaching a total equivalent to 378 million bpd in 2050.
The report cited growing populations in many countries, expanding economic growth worldwide, a growing emphasis on living in large energy-hungry cities, and the voracious power demands of artificial intelligence (A.I.) as factors driving increased demand.
Much of this growing demand is expected to come from developing nations in Africa and the Middle East, as well as the rising industrial powerhouse of India. Those nations prominently display all of the major factors for increased demand: growing industries, growing populations, and urbanization.
The report fretted that President Donald Trump withdrawing the United States from the Paris climate agreement will pave the way for “higher demand for hydrocarbons in general, and oil and gas in particular.”
That assertion seems highly debatable given the loud pronouncements of “Global South” developing nations during both the Biden and Trump administrations, intending to burn as much fossil fuel as necessary to achieve their industrial goals. None of them appeared to be waiting to see if Trump won the 2024 election and withdrew from the Paris agreement.
OPEC’s projection on urbanization was rather dramatic, anticipating roughly 1.9 billion people moving into cities over the next 25 years. Urbanization is also leading to major growth in road and air travel, which consume a great deal of fuel.
OPEC leaders are urging member nations to invest in production and storage capacity to meet the rising world demand for oil. The 2050 report predicted demand will surge in roughly four years when China’s economy begins to improve, so oil-producing countries should start building up their inventories now. About $18.2 trillion in investments will be needed over the next 25 years to meet demand.
Bloomberg News seemed puzzled by the new report, calling its predictions of surging oil demand through the middle of the century “an outlier even within the petroleum industry.”
“BP Plc, Bank of America Corp., the International Energy Agency and Wood Mackenzie are among many forecasters who believe demand will stop growing at some point in the next decade as top consumer China shows signs of peaking. Scientists have said the uninhibited burning of fossil fuels envisioned by OPEC would trigger environmental catastrophe,” Bloomberg observed.
And yet, Bloomberg conceded that “oil use has surpassed expectations in recent years as the transition to renewable energy proves challenging.”
Bloomberg likewise dinged OPEC for making some excessively optimistic projections about oil demand in the past, but then noted those rosy projections have led the OPEC+ alliance — the expanded grouping that includes Russia — to grab 52 percent of the growing market by 2050, an increase of four percent over its current share. The lesson would appear to be that underestimating the growth in demand for reliable, affordable energy is perilous.
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