Wednesday, July 24, 2024
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OPEC does not foresee a peak in oil demand in its long-term projections and anticipates demand to rise to 116 million barrels per day (bpd) by 2045, with the potential for even higher figures, as stated by OPEC Secretary General Haitham Al Ghais on Thursday. This stands in contrast to the International Energy Agency (IEA), which in a report on Wednesday predicted oil demand would peak by 2029 and stabilize at around 106 million bpd towards the end of the decade.

Al Ghais, writing in Energy Aspects, criticized the IEA report, calling it a “dangerous commentary, especially for consumers,” warning that it could lead to unprecedented energy volatility. OPEC+, an alliance of the Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and allies including Russia, has implemented a series of significant output cuts since late 2022 to support the market.

OPEC+ members are currently reducing output by a total of 5.86 million bpd, approximately 5.7% of global demand. This includes cuts of 3.66 million bpd, which the group agreed on June 2 to extend until the end of 2025, and additional cuts of 2.2 million bpd that OPEC+ will gradually phase out over the year starting in October.

The IEA, headquartered in Paris and advising industrialized nations, recently moved up its forecast for peak oil demand from 2030 to 2029. It predicted that oil demand would begin to decline in 2030 as the U.S. and other non-OPEC countries increase supply. Al Ghais contended that similar predictions by the IEA had been proven incorrect in the past, citing examples such as the IEA’s assertion that gasoline demand had peaked in 2019 and coal demand in 2014.

OPEC projects oil demand growth of 4 million bpd over the two years of 2024 and 2025. Other forecasters also predict significant growth, estimating an increase of over 3 million bpd during this period. Even the IEA anticipates growth of 2 million bpd through this period, followed by an increase of 0.8 million bpd in 2026, before projecting a dramatic drop-off to almost no growth from 2026 through 2030.

Al Ghais argued that the IEA’s scenario is unrealistic and would have a negative impact on global economies. He described the IEA’s predictions as part of an ongoing “anti-oil narrative.”

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