Global Oil Demand Will Need $12.1 trillion in Investment, Says OPEC

The Organisation of the Petroleum Exporting Countries (OPEC) estimated $12.1 trillion in investment is required to meet this demand despite the energy transition after raising its projections for the medium- and long-term global oil consumption.

In contrast to other forecasts, who believe that the rise of renewable energy sources and electric vehicles will cause oil consumption to plateau before 2030, the OPEC offers a different outlook in its 2022 World Oil Outlook.

The 13 members of OPEC, who depend on oil revenue, would benefit from another decade of rising oil consumption.

The group has been making the case that the energy transition should include oil and that investors’ attention to economic, social, and governance (ESG) issues has made a lack of investment worse.

In the report’s prologue, OPEC’s secretary general Haitham Al Ghais stated that “the overall investment number for the oil sector is $12.1 trillion out to 2045,” noting that this was an increase from the projection from the previous year.
The COVID-19 epidemic, industrial downturns, legislation aimed at halting finance for fossil fuel projects, and ongoing underinvestment in the global oil industry are important causes for concern, nevertheless.

When the epidemic affected demand in 2020, OPEC changed its tune and predicted that consumption would finally slow after years of expecting constant growth.

OPEC continued to hold the belief that after 2035, global consumption will peak.

Other forecasts from businesses and banks indicate an earlier peak in oil demand.

For the first time in its history of modeling, the International Energy Agency (IEA) predicted last Thursday that demand for all fossil fuels was about to peak, with oil demand leveling off in the middle of the next decade.

According to the analysis, global oil demand would increase by 2.7 million bpd from 2022 to reach 103 million barrels per day in 2023. The forecast for 2023 shows a 1.4 million bpd increase in the overall demand.

According to OPEC, demand would be higher than expected by about two million bpd by the end of the projected period in 2027 compared to last year.