OPEC (Organization of the Petroleum Exporting Countries) predicts a 23% rise in global oil demand by 2045, around 110 million barrels each day, considering that the economy worldwide is expected to grow twice fold along with rising urbanisation and global population.
In the near term, oil is irreplaceable despite the rise in the use of hydrocarbons and renewable energy sources, which are expected to dominate the market in the future.
The outlook of OPEC is very different from the one of the International Energy Agency, which predicted a surge in oil demand before clean energy takes over completely. The forecast by IEA was supported by the growing shift towards electric vehicles, better fuel efficiency as well as other technologies which could hurt oil demand. However, the organisation of the petroleum exporting countries disagrees. All things considered, both organisations jointly agree that Asia, specifically India and China, will be the biggest markets for oil.
Although oil demand doesn't seem to be going anywhere, and projections for the near term remain strong, the growth of oil demand may be hindered by the rise in sales of electric vehicles. But that is a mere possibility.
The EV industry will likely not be able to totally replace oil demand as its sales are only practical if demand for charging can be sustained via accessible and cheap infrastructure.
Besides these factors, oil demand is expected to stay bullish in the medium term as oil will be used in the petrochemical industry in spite of the entrance of EVs into the market.
According to the Procurement Resource article, OPEC has forecasted a 23 percent rise in global oil demand on the back of a doubling economy, population increase and rapid urbanisation. However, this forecast is contradictory to the one by International Energy Agency, which stated that oil demand would peak before declining as markets will be taken over by EVs. However, both organisations concluded that oil demand from Asia, specifically India and China, is not going away anytime soon.
Assistant Vice President - Procurement Research
Advancing procurement research and sourcing strategies for global companies across FMCG, Food & Beverages, Agriculture, Energy, and Chemicals, with expertise in cost modeling, supplier analysis, and commodity intelligence to deliver value.
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