Global oil demand is expected to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to plateau until 2045, OPEC said in its 2021 World Oil Outlook (WOO) on Tuesday.
OPEC’s timeline for peak oil demand in its 2021 outlook is a few years earlier than in last year’s WOO report, which had forecast that global oil demand would grow steadily until the late 2030s, when it would begin to plateau. After the COVID pandemic last year, OPEC for the first time put a timeline to peak oil demand.
In this year’s outlook, OPEC sees oil demand growing “strongly” in the short- and medium-term before demand plateaus in the long term. Renewables other than hydropower and natural gas are set to grow the most between 2035 and 2045, when oil demand is expected to be flat, according to OPEC’s estimates. Renewables and natural gas will continue to play a significant role in the evolving energy mix.
Despite the expected plateauing in oil demand after 2035, oil will still be the number one energy source in 2045, OPEC Secretary General Mohammad Barkindo said at the event to launch the 2021 outlook.
Oil demand will be back to pre-pandemic levels as soon as next year, OPEC reckons. By 2026, global demand for crude would have risen to 104 million bpd, the cartel estimates.
Longer term, the energy outlook remains uncertain, OPEC said, as the energy transition and the efforts to eliminate energy poverty will push oil demand in opposite directions.
One thing is certain, though, the oil industry will need massive investments over the next 25 years in order to meet demand, according to OPEC.
The industry will need cumulative long-term upstream, midstream, and downstream oil-related investments of $11.8 trillion by 2045, OPEC says.
By Tsvetana Paraskova for Oilprice.com