Opec oil Outlook: Global oil demand is expected to continue to grow through 2035

Opec released its World Oil Outlook report at 20:30 PM Beijing time on Tuesday (September 28). The report said that oil demand in 2021 is expected to be 96.6 million barrels per day. As the world recovers the pandemic, oil demand will increase by 1.7 million b/d to 101.6 million b/d in 2023.

Opec its Allies are unwinding last year's record supply cuts as demand recovers. But there are signs that some Opec + producers are unable to pump more oil because of a lack of investment, that has boosted prices.

In its report, Opec lowered its forecast for long-term oil demand, saying the pandemic competition electric vehicles would bring changes to consumer behavior. Global oil market share is expected to rise 33 percent in 2020 to 39 percent in 2045, the report said. Global oil demand will continue to grow until 2035 decline by the 2030s.

Last year, OPEC+ agreed to cut production by 9.7 million barrels a day, 10 percent of global supply. The crude is returning to the market as demand recovers, the report says the market could suffer further volatility supply shortages without the necessary investment in the oil industry.

Opec also said on Tuesday that the world needs to continue investing in oil production even as it transitions to energy to avoid a squeeze. Opec's view contrasts sharply with that of the International Energy Agency, which said in a report in May that investors should finance new oil projects if the world wanted to achieve net zero emissions.

But in terms of energy mix, the report points out that oil will still occupy a large share of the energy mix in 2045; Coal's share of global energy demand will fall 27% in 2020 to 17% in 2045; Renewables' share of global energy demand will rise 2.5 per cent in 2020 to 10 per cent by 2045; The share of natural gas, nuclear biomass in the global energy demand mix is expected to change little between 2020 2045.

Opec sees its own crude oil production falling below 2019 levels in 2020-2026 as non-OPEC supply recovers despite rising demand. After years of predicting growth, the group last year switched to acknowledging that demand would peak one day. This year's crude oil report predicts world oil demand will average 106.6 million barrels per day in 2030, down 600,000 barrels per day last year's forecast.

Still, Opec is optimistic about its future prospects, arguing that its market share will rise in coming decades as competition non-OPEC producers wanes. Opec expects US shale oil production to peak around 2030.

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Source: International Petroleum Network