OPEC Sees No Peak Demand in Long Term

OPEC does not see a peak in oil demand in its long-term forecast and expects demand to grow to 116 million barrels per day (bpd) by 2045, and may be higher, the secretary general said yesterday.

The International Energy Agency said in a report on Wednesday it sees oil demand peaking by 2029, levelling off at around 106m bpd towards the end of the decade.

Hathaim Al Ghais, writing in Energy Aspects, called the IEA report “dangerous commentary, especially for consumers, and will only lead to energy volatility on a potentially unprecedented scale”.

OPEC+, which groups Saudi-led OPEC, the Organisation of the Petroleum Exporting Countries, and allies including Russia, has made a series of deep output cuts since late 2022 to support the market.

OPEC+ members are cutting output by a total of 5.86m bpd, or about 5.7 per cent of global demand.

That includes cuts of 3.66m bpd, which the group on June 2 agreed to extend by a year until the end of 2025, and cuts of 2.2m bpd, which OPEC+ will gradually phase out over the course of a year from October.

The IEA moved forward the date for peak oil demand after having said in October that it would occur by 2030. It said oil demand would begin to contract in 2030 while the US and other non-OPEC countries add to supply.

“At OPEC, we see oil demand growth of 4 mb/d over the two years of 2024 and 2025, with other forecasters also seeing an expansion of over 3 mb/d. Even the IEA sees growth of 2 mb/d over this period, followed by growth of 0.8 mb/d in 2026. It then dramatically drops off a cliff to almost no growth in the next four years through 2030,” he said.