Crude oil demand is set to rise to 110 million barrels daily by 2045, which would be a 23% increase from current levels.
This is what the Secretary General of OPEC, Haitham al Ghais, said today, as quoted by Reuters.
The forecast comes a week after the International Energy Agency predicted oil demand growth will slow in the next few years, shrinking from 2.4 million bpd this year to 400,000 barrels daily in 2028, with peak demand in sight.
The IEA’s bearish forecast was driven by a view that the accelerated deployment of electric vehicles, higher fuel efficiency, and “other technologies” would hurt demand growth. OPEC, it appears, begs to differ. What the two seem to agree on is that Asia, and China and India in particular, will drive global oil demand for the observable future.
However, even that growth may be undermined by electric vehicles, according to a recent report by China’s National Petroleum Corporation, or CNPC. The research arm of the state-owned major forecasted that oil demand growth this year would be lower than previously expected because of the increase in EV sales.
Yet that increase in sales is not a certainty. In fact, Beijing recently had to extend tax breaks for EV buyers to stimulate flagging sales. Initially set to be phased out this year, the subsidies were extended to the end of 2027. The total tax savings for buyers could reach $72 billion, according to CNBC.
The IEA sounded a warning note about EV sales in its report, too. “Growth in EV sales can only be sustained if charging demand is met by accessible and affordable infrastructure, either through private charging in homes or at work, or publicly accessible charging stations,” the agency said in its report from earlier this month.
Demand for oil from the petrochemicals industry, meanwhile, is seen to continue strong over the medium term by most forecasters, even if EVs begin to undermine demand for fuels.
By Irina Slav for Oilprice.com