OPEC Raises Its Estimate for Future Oil Demand - Investopedia

OPEC Raises Its Estimate for Future Oil Demand

Key Takeaways

- OPEC raised its estimate for medium- and long-term demand for oil, and said trillions of dollars in spending would be needed to keep up with that higher demand.
- The oil cartel pointed to demand growth in China and India, as well as other countries in Asia, Africa, and the Middle East.
- OPEC warned that efforts to stop new investments in oil projects would be dangerous.

The Organization of the Petroleum Exporting Countries (OPEC) raised its medium- and long-term outlook for global oil demand, and suggested trillions of dollars would have to be spent to provide enough crude to meet it.

In its 2023 World Oil Outlook report, OPEC indicated that by 2045, the world will need 116 million barrels of oil per day (bpd), up from 99.6 million bpd in 2022, and about 6 million bpd more than what it predicted last year. It pointed to growth in China, India, and other countries in Asia, Africa, and the Middle East. It also sees increases over the next several years.

The cartel noted that the oil sector would be required to spend $14 trillion to keep up with that demand, $1.9 trillion more than last year's guidance, even as use of electric vehicles (EVs) grows. It argued that by 2045, there will be 2.6 billion cars worldwide, and 72% will be powered by internal combustion engines (ICE).

OPEC Secretary General Haitham Al Ghais argued that calls to stop investments in new oil projects “are misguided and could lead to energy and economic chaos.”

The position from the big oil producing nations is in direct contrast with the outlook from the International Energy Agency (IEA), which said in June that oil demand could peak at the end of this decade.

Crude oil futures were over 4% higher in early trading on Monday amid concerns about conflict in the Middle East after fighting between Hamas and Israel broke out over the weekend.
TradingView tips@investopedia.com