© Stocksak. FILE PHOTO – A 3D printed oil pump jack can be seen in front the displayed OPEC logo in this illustration, April 14, 2020. REUTERS/Dado Ruvic/File Photo
By Alex Lawler
LONDON, Stocksak – Despite the growing role of electric cars, OPEC believes that world oil demand will continue rising for a longer time than other forecasters.
The Organization of the Petroleum Exporting Countries will update its long-term oil demand projections in its 2022 World Oil Outlook, which is due to be released on Oct. 31. Oil demand is expected to plateau in 2021, according to the 2021 version.
Producers and OPEC would benefit from another decade of rising oil demand. The 13 members of OPEC depend on oil income and this would highlight the need to continue investing in new oil supplies. Consumers and governments who are urging oil consumption to combat climate changes would be less happy.
OPEC made a shift in 2020 after the pandemic impacted demand. It said it would eventually plateau, after years of forecasting ever-rising oil demand. The most recent update will keep OPEC in the top tier of optimistic forecasters for oil demand.
(OPEC Long Term Global Oil Demand Forecast – Changes Since 2019 https://fingfx.thomsonreuters.com/gfx/mkt/byprjlnyjpe/Pasted%20image%201632832508740.png)
One source at OPEC stated that the outlook for the demand outlook was similar to last year.
Other forecasts predict that oil demand will peak earlier. This is according to TotalEngergies, which has predicted it will happen before 2030.
Thursday’s International Energy Agency (IEA) stated that the demand for all fossil-fuels was at a peak or plateau. The agency’s modelling history has shown that oil demand will stabilize in the middle of the next decade.
OPEC’s Vienna headquarters declined answering questions prior to the publication’s launch Monday in Abu Dhabi. Haitham Al Ghais (OPEC Secretary General) and other OPEC officials are expected to attend.
Another OPEC source stated that Russia’s invasion in Ukraine – which has caused oil and gas prices to soar and led to an energy crises – could boost oil consumption in the near future due to fuel switching and the ongoing recovery from the pandemic.
This source stated that oil and natural gas would continue to be the main fuels of the world’s energy mix up until the middle century.
PROJECTS WITH LOWER RESULTS
Last year, OPEC witnessed oil demand rise to 108.2 millions barrels per day by 2045, compared to 90.6 million bpd in 2020.
For the last few years, the group has been lowering 2045 as a projection, citing changes in consumer behavior resulting from the pandemic of electric cars and the competition.
Two former OPEC officials cited long-term trends that will affect demand.
“Electrification is a priority for oil-producing countries,” said Hasan Qabazard from 2006 to 2013, OPEC’s head research officer. He is also a Kuwaiti. “People are buying electric cars in Kuwait,” said Hasan Qabazard, OPEC’s head of research from 2006 to 2013.
Qabazard stated last year that demand could peak within a decade, maybe later, and has not changed his opinion since.
An ex-minister of OPEC said that the longer-term consequences of the Ukraine war could encourage a shift to renewables.
“The war in Ukraine has changed Europe and the United States’ reliance on Russia’s oil and gas,” said Chakib Khelil, a former Algerian oil minister and OPEC president. “Europe will continue to rely on renewable energy more than Russia’s oil and gas in the future.”
He said that it was “highly likely” that demand will plateau earlier than anticipated in the current OPEC forecast.