OPEC expected to maintain oil demand outlook in long term

Two sources from the Organization of the Petroleum Exporting Countries (OPEC) said they would not change much in its highly anticipated key report its view that global oil demand will continue to rise for longer than many analysts expect, despite the growing role of renewable energy and electric cars. ‎

According to “Reuters”, the organization is scheduled to update its forecast for long-term oil demand in its World Oil Outlook for 2022, which is scheduled for release on October 31. The 2021 version included expectations of stabilizing oil demand after 2035.

Oil demand growth for another decade or more will be a boost for producers and OPEC, whose 13 members depend on oil revenues, and highlight the need for continued investment in new oil supplies. Consumers and governments urging efforts to reduce oil use to combat climate change will be less happy.

OPEC adopted a shift in 2020, when demand was affected by the pandemic, and said that its pace would eventually decline, after it had been for years expecting demand to increase without stopping. The new update is likely to keep OPEC among the most optimistic about oil demand.

“It will be similar to last year in terms of demand forecasts,” one of the sources said on condition of anonymity. The second source said that OPEC did not present its timetable regarding when it expects demand to stabilize.

Other estimates suggest that oil demand will peak sooner. Total Energy expects this to happen before 2030.

International Energy Agency (IEA) stated yesterday, Thursday, that the demand for all types of fossil fuels will reach its peak or stabilize, for the first time in the agency’s history, and that the demand for oil will stabilize in the middle of the next decade.

The headquarters of the Organization of the Petroleum Exporting Countries in Vienna declined to answer questions before the report was issued next Monday in Abu Dhabi, in the presence of the Organization’s Secretary-General Haitham Al-Ghais and other officials in the organization.

Another OPEC source said that Russia’s invasion of Ukraine, which sent oil and gas prices soaring and led to an energy crisis, may boost oil demand in the near term due to the shift in fuel use, as well as the ongoing recovery from the pandemic.

“Oil and gas are expected to remain the most important in the global energy mix until the middle of the century,” the source added.

Last year, OPEC expected oil demand to reach 108.2 million barrels per day in 2045, compared to 90.6 million barrels per day in 2020.

For several years, the organization has been reducing its forecast for 2045 due to changes in consumer behavior due to the pandemic and competition from electric cars.

In contrast, this year, OPEC is expected to raise its forecast for demand in 2045, according to the statements of the two exporters.

But two former OPEC officials pointed to long-term trends that will affect demand

A former OPEC minister said the long-term repercussions of the war in Ukraine may encourage a shift towards renewable energy sources.