May 25, 2024

OPEC launches 2022 WOO, raises annual global oil demand projection from 97mb/d, 2021 to 110 mb/d in 2045


Oredola Adeola

Organization of the Petroleum Exporting Countries (OPEC), has raised its projection for global oil demand from almost 97 million barrels a day (mb/d) in 2021 to around 110 mb/d in 2045, with annually addition of average 2.7 million barrels of oil equivalent per day from 2022 to 2045.

This was contained in the 2022 OPEC World Oil Outlook (WOO) launched on Monday at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2022 in the United Arab Emirates (UAE), offering a detailed review and assessment of the medium- and long-term prospects for the global oil and energy industries to 2045.

OPEC’s outlook reflected “surprisingly robust growth in 2022 and 2023” and a slower oil-to-gas shift than previously forecast.

One of the major emphases of the 2022 WOO is that technological advancements will shape the global energy landscape while public policies relating to energy demand and supply are expected to become more stringent over the forecast period.

The latest edition of WOO suggested that global oil demand increased to 105.5mn b/d in 2025 from 96.9mn b/d in 2021, compared to the 2007 edition which pegged global demand at 103.6mn b/d in 2025.

The revised global demand according to OPEC, was due to strong focus on energy security issues leading to slower oil substitution especially by natural gas compared to past outlooks.

EnergyDay gathered that OPEC’s WOO was first published in 2007, to provide an in-depth review and analysis of the global oil and energy industries, and offers assessments of various scenarios in the medium- and long-term development of the oil industry.

The outlook provides insights into the upstream and downstream, supply and demand, investments, the potential impact of policies, and issues related to environment and sustainable development.

It also provides expert analysis of many of the challenges and opportunities facing the global oil and energy industry.

Opec expects the pace of oil demand growth to slow down markedly in the longer term, with an average increase of just 200,000 b/d each year in 2030-35 and forecasts global demand at 108.3mn b/d in 2030, 109.5mn b/d in 2035, 109.8mn b/d in 2040 and 109.8mn b/d in 2045.

The unsteady market outlook according to the report is due to efficiency improvements and the substitution of oil by gas and renewable energy.

His Excellency, Haitham Al Ghais, OPEC’s Secretary General, in launching the publication at ADIPEC said: “The WOO 2022 once again underscores the increasingly complex nature of the global oil and energy industries. It is a challenging environment, and one that requires expert analysis to help us navigate both the challenges and opportunities ahead. The WOO provides this.”

He further said, “This includes the significant penetration of EVs [electric vehicles] in the road transportation sector, ongoing electrification of residential and industrial sectors, and the penetration of alternative fuels in the marine and aviation sectors,”

“All forms of energy will be needed to address future energy needs. Energy poverty remains an issue throughout the forecast period, with a wide gap remaining between developed and developing countries.

“Oil is expected to retain the largest share in the energy mix throughout the outlook period, accounting for almost a 29% share in 2045.

“Other Renewables – combining mainly solar, wind and geothermal energy – expand by 7.1% p.a. on average, significantly faster than any other source of energy.

“All major fuel types witness growth, with the exception of coal. Globally, oil demand is projected to increase from almost 97 million barrels a day (mb/d) in 2021 to around 110 mb/d in 2045.

“Non-OECD countries drive oil demand growth, expanding by close to 24 mb/d over the forecast period, whereas the OECD declines by over 10 mb/d between 2021 and 2045.

“Recent annual investment levels have been significantly below this, due to industry downturns, the pandemic, and the increasing focus on environmental, social, and governance (ESG) issues.

“Crude and condensate flows between the Middle East and Asia-Pacific remain the most important oil trade link, with volumes increasing from below 13.5 mb/d in 2021 to 19.5 mb/d in 2045.

“The Asia-Pacific region is forecast to remain the most important crude oil importing region throughout the forecast period, with imports rising by over 7.5 mb/d.

Opec expects the global supply of liquids to increase to 105.7mn b/d in 2025, from 95.2mn b/d in 2021, and then to 109.8mn b/d in 2045. Opec members will account for 68pc of the growth out to 2045, leaving the group’s market share at 39pc compared with 33pc last year.

OPEC however cautioned that there is significant uncertainty surrounding the longer-term supply picture because of “major risks to the economic outlook, high inflation, energy policy goals being confronted with energy security challenges and questions regarding a perceived shortfall in upstream investment, including new geopolitical tensions.

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