The Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Haitham Al Ghais, has emphasized the need for a substantial investment of $14 trillion between 2023 and 2045 to meet the growing global demand for oil. In an article titled “Why OPEC has increased its long-term oil demand outlook in the World Oil Outlook, WOO 2023,” Al Ghais discussed the rising global demand for oil and its implications.
Al Ghais stressed that the World Oil Outlook (WOO) for 2023 estimates the total investment requirements to be $14 trillion over this period, averaging around $610 billion per year. He called for a stable and investment-friendly environment that benefits both producers and consumers, emphasizing the importance of moving away from the notion of ceasing investment in new oil projects.
He noted the recent revision of the long-term oil demand outlook in the WOO 2023, which anticipates a demand of 116 million barrels per day (mb/d) by 2045. This represents an increase of over six mb/d compared to the WOO 2022. Notably, nearly half of this revision in demand comes from Organisation for Economic Co-operation and Development (OECD) countries, which have increased by 2.6 mb/d compared to the previous outlook.
The OECD’s increased demand is influenced by various energy policy shifts, reassessments of energy transition speed and nature, and changes in the economic landscape. Many OECD countries have encountered challenges and pushbacks on ambitious net-zero policies and targets, prioritizing energy security and socio-economic development instead. This is evident in policy adjustments such as the UK’s postponement of the ban on internal combustion engine (ICE) sales and the EU’s relaxation of EURO 7 emission standards, which may affect oil demand and efficiency improvements.
Al Ghais’ remarks highlight the complex dynamics of global oil demand and the need for substantial investments to meet it.