OPEC claims oil phaseout is a "fantasy" and that there is no peak oil

[Simon]

OPEC claimed in its annual World Oil Outlook (WOO) that there was "no peak oil on the horizon" and that phasing out oil was a "fantasy".

The Saudi-led oil cartel concluded in its report that oil and gas make up well over half of the global energy mix today and, according to their assessment, the demand for oil and gas will continue to increase until at least 2050. For oil alone, OPEC expects to see demand reaching over 120 million barrels a day by 2050.

"What the Outlook underscores is that the fantasy of phasing out oil and gas bears no relation to fact," OPEC Secretary General Haitham Al Ghais said. "A realistic view of demand growth expectations necessitate adequate investments in oil and gas, today, tomorrow, and for many decades into the future," he added.

OPEC expects that the demand for all energy sources will continue to increase, with the exception of coal. And while the largest increase is expected to come from renewable energy sources, mainly wind and solar, the share of oil and gas in the energy mix will remain high. According to the report, oil will remain the largest with a total share at above 29 percent in 2050. Following renewables, OPEC expects that natural gas will have the second-largest increase. Coal demand is forecast to decline due to stringent national climate and energy policies, the report concludes.

Future energy demand (mboe/d = million barrels of oil equivalent a day):

• Renewable energy sources will grow by 43 mboe/d (expanding from 9.6 mboe/d in 2023 to 52.4 mboe/d in 2050).
• Natural gas will grow by 20.5 mboe/d.
• Oil will grow by by 16.7 mboe/d.
• Coal will decline by almost 29 mboe/d between 2023 and 2050.

The increased demand for energy is driven by a rising world population and a growing demand from primarily India and other non-OECD countries. The strongest energy demand will come from petrochemicals, road transportation and aviation, the report assesses.

Obviously, the reports' forecast is completely contrary to previous assessment from the International Energy Agency, which projects that the demand for oil will peak as early as this decade thanks to renewable energy and electric cars.

Just last month, IEA Executive Director Fatih Birol told news media that the demand for oil is slowing down. He attributed this decline in oil to the growth of electric cars and the weakening of the Chinese economy. In 2023, Birol said that "the peak in fossil fuel demand is moving even closer" and that the transition to clean energy is accelerating.

In a few days, IEA's annual flagship report, World Energy Outlook, will be released. We'll see then what kind of projections IEA will make of future energy demand and growth - and if it's in line with OPEC's grim projections.