Opec raises 2050 energy demand outlook amid expansion of global economies

The National

2 days ago

Opec has raised its forecast for world energy demand for the medium and long term as global economies expand and population growth boosts requirements for oil.
Overall energy demand in the long term is expected to increase by 23 per cent to reach 378 million barrels of oil equivalent per day by 2050, the supergroup of oil producers said on Thursday in its World Oil Outlook 2050 report.
In the medium term, global oil demand is projected to increase by 9 per cent to reach 113.3 million barrels per day by 2030, from 103.7 million bpd in 2024, while in the long term, it is forecast to surge by 18.5 per cent to reach 123 million bpd by 2050, Opec said.
This will be driven by 'expanding economic growth, rising populations, increasing urbanisation, new energy-intensive industries like artificial intelligence, and the need to bring energy to the billions without it', Haitham Al Ghais, secretary general of Opec, said.
The global population is expected to reach 9.7 billion by 2050, from 8.2 billion in 2024, with the working age population set to increase by 800 million over the same period to reach about 6.1 billion.
The global urbanisation rate is also expected to rise to 68 per cent from 58 per cent during the period, resulting in about 1.9 billion people moving to cities by 2050, Opec said.
The world economy, meanwhile, is set to more than double in size to $358 trillion in 2050, with global average income expected to rise during the period, according to Opec.
India, Africa and Middle East to lead demand growth
Countries outside the Organisation for Economic Co-operation and Development (OECD), including India, Africa and Middle East states, are projected to lead the oil demand growth for both medium and long-term forecast periods.
The non-OECD oil demand during the long term is projected to increase by almost 28 million bpd, while OECD oil demand is set to witness a decline of 8.5 million bpd.
Combined demand in India, rest of Asia, the Middle East and Africa is set to increase by 22.4 million bpd between 2024 and 2050, with India alone adding 8.2 million bpd, the report said. China's oil demand is projected to increase by less than 2 million bpd over the same period.
Road transport and petrochemicals to play key role
Road transport, petrochemicals and aviation are expected to play a key role in boosting demand for oil. The transportation sector accounted for more than 57 per cent of global oil demand in 2024 and is projected to retain this share over the entire forecast period. A significant demand increase of 4.7 million bpd is also projected in the petrochemicals sector.
'Oil underpins the global economy and is central to our daily lives,' Mr Al Ghais said. 'There is no peak oil demand on the horizon.'
Opec+ countries have been boosting production since April in anticipation of higher demand after curtaining production for several years.
The group will boost production by 548,000 bpd for August, it said last week, after increasing output by 411,000 bpd for each of May, June and July. The group also approved an increase of 138,000 bpd in April.
"You can see that even with the increases for several months, we haven't seen a major build-up in inventories, which means the market needed those barrels," Suhail Al Mazrouei, UAE's Minister of Energy and Infrastructure, said in Vienna on Wednesday.
"What we want is stability and you cannot be short-sighted just by looking at the price. We need the price to be right for investments to happen," he said, adding that countries with big oil reserves were still not investing enough.
Boosting investments in oil sector
Mr Al Ghais also underscored the importance of boosting investments in the oil sector, with investment requirements of 18.2 trillion till 2050.
'It is vital that these investments are made for consumers and producers everywhere, as well as for the effective functioning of the global economy at large,' Mr Al Ghais said.
Oil markets remained volatile this year amid US President Donald Trump's tariff plans and the Israel-Iran conflict.
Crude prices started the year strongly. The closing price of Brent, the benchmark for two-thirds of the world's oil, peaked at more than $82 a barrel on January 15, while West Texas Intermediate, the gauge that tracks US crude, hit almost $79 per barrel on that day.
However, demand concerns, a slowing global economy and less-than-stellar growth in China, the world's biggest crude importer, have weighed on crude prices this year.
Mr Trump's push to impose hefty tariffs on trade partners has been the biggest driver of declining oil prices.