Explainer: What Did OPEC Reveal In Its World Oil Outlook Report?

In order to meet growing energy demand, the global oil industry requires investments of $14 trillion until 2045, OPEC said in its World Oil Outlook report on Monday.

Last year, the group forecast long-term oil sector investments of $12.1 trillion to boost production and meet increasing demand.

Global energy demand is expected to expand by about 3 million barrels of oil equivalent a day every year or 23% in the period to 2045, the group noted.

“Calls to stop investments in new oil projects are misguided”

“History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy’s interwoven complexities.”

Haitham Al Ghais, OPEC secretary general, stressed: “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.”

The group elevated its oil demand forecast for 2045 by 6 million barrels per day to 116 million bpd and said crude consumption is expected to climb “even higher”.

Share Of Fossil Fuels In The Energy Mix To Drop

According to the report, consumption in non-OECD (Organisation for Economic Co-operation and Development) countries, could increase by 69 million barrels of oil equivalent per day.

India will represent more than a fifth of the non-OECD demand growth by 2045. Currently, the country is the world’s third-largest crude importer.

OPEC expects the share of fossil fuels in the energy mix to drop to about 69% in 2045, from more than 80% last year. But the combined share of oil and gas would still represent 54%.

Limiting Global Temperature Rises To 1.5C

Meanwhile, demand for solar and wind power is expected to record an increase of 34.3 million barrels of oil equivalent per day, OPEC added.

Owing to a surge in demand for renewables, the world is potentially close to reaching the peak of carbon emissions from the global electricity sector.

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Experts believe the incredibly rapid surge in solar and wind power is necessary to reach the Paris Agreement’s goal of limiting global temperature rises to 1.5C above pre-industrial levels.