OPEC held firm to projections that global oil demand will keep growing for another decade, and said it would be dangerous to abandon fossil fuels.
World oil consumption will climb by 13% to reach 109.5 million barrels a day in 2035 and hold around this level for another decade, the Organisation of Petroleum Exporting Countries said in its annual World Oil Outlook. The forecast clashes with a widespread view in the petroleum industry that demand will hit a peak around the end of this decade as the threat of climate change spurs a switch to renewables.
World leaders will gather in Egypt next month for the next round of United Nations negotiations on global warming, known as COP27. OPEC Secretary-General Haitham Al Ghais reiterated the warning given at last year’s climate talks that a complete break with hydrocarbons is “potentially dangerous to a world that will continue to be thirsty for all energy sources.”
The organisation’s stance received some validation in the past year, as supplies of natural gas and other fuels failed to keep pace with the post-Covid rebound in demand following years of oil industry under-investment.
Russia’s invasion of Ukraine in February, and the ensuing disruption of natural gas flows, has posed a further complication for the low-carbon transition, as consuming nations turn to more polluting fuels such as oil products and coal as a substitute.
Despite this temporary boost for fossil fuels, the crisis may ultimately accelerate the transition to renewable energy as countries seek long-term alternatives to Russian supplies, according to a report last week from the International Energy Agency, which advises most major economies.
In contrast, OPEC sees oil’s share in the global energy mix, currently at 31%, dipping only slightly by 2045 to 29%.
The organisation’s outlook for oil isn’t the only point of difference with western governments right now.
Group leader Saudi Arabia irked the White House last month with a decision to slash oil production by 2 million barrels a day. US officials complained that the move lends support to the Kremlin in its war on Ukraine, though Riyadh has said it was necessary to stabilise crude markets.
OPEC sees its share of global oil supply expanding over the next two decades as output from the group’s rivals ebbs. Total production of crude oil and other oil liquids from the organisation’s 13 members will climb from last year’s level of 31.6 million barrels a day to reach 38.3 million a day in 2035. It will keep rising to reach 42.4 million a day a decade later.
The report didn’t give figures to separate its production of crude oil, the commodity OPEC uses when allocating output quotas.