Oil demand will continue to rise even as the world moves to clean energy and the industry requires “huge investments” of $12.1 trillion in the period to 2045 to increase production and meet demand, according to the Organisation of the Petroleum Exporting Countries (Opec).
Demand for oil as a primary fuel is expected to increase to 101 million barrels of oil equivalent a day in 2045 from 88 million barrels of oil equivalent a day in 2021, with its share in the energy mix dropping to 29 per cent from 31 per cent during the period, the 13-member organisation said in its World Oil Outlook on Monday.
Even as the pace of oil demand growth slows “oil is set to retain the highest share in the global energy mix during the entire forecast period,” Vienna-based Opec said.
“The combined market share of oil and gas in the global primary energy mix is expected to remain above 50 per cent to 2045.”
Oil demand in China, the world’s second-largest economy and biggest importer of crude, is set to rise to 16.5 million barrels of oil equivalent a day by 2045 from 14.2 million barrels of oil equivalent a day last year led by the road transport sector and petrochemical industry, according to Opec data.
Oil demand in India, the world's third-largest crude importer, will increase to 11 million barrels of oil equivalent a day from 4.8 million barrels of oil equivalent a day last year.
The report highlights the need to increase investment in the oil and gas sector amid an anticipated increase in demand due to growing populations in a number of countries.
“Chronic underinvestment into the global oil industry in recent years, due to industry downturns, the Covid-19 pandemic, as well as policies centred on ending financing in fossil fuel projects, is a major cause of concern,” Opec secretary general Haitham Al Ghais said in the report.
The oil producers group remains “committed to investments to ensure oil supply meets demand and to further decarbonise the industry”, he said.
Member states are “making significant investments in other energies, such as renewables, nuclear, gas and hydrogen. We believe that an all-options, all-solutions and all-technologies must be utilised”, Mr Al Ghais said.
Other senior executives have also recently highlighted underinvestment in the oil and gas sector.
The energy crisis existed before “black swan events that impacted every country”, however, among the root causes of the crisis was the inability of financiers, investment institutions and many of the energy companies to invest, Khaldoon Al Mubarak, managing director and chief executive of Mubadala Investment Company, told the Future Investment Initiative in Riyadh last week.
Maintaining investment in oil and gas is critical for energy security and economic progress as current market dynamics do not reflect underlying fundamentals and long-term demand growth, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, said at the Energy Intelligence Forum in London this month.
The global oil and gas industry requires more than $600 billion of investment annually to keep up with the growing demand for energy, even as the world transitions to cleaner forms of energy, Dr Al Jaber, who is also group chief executive of Abu Dhabi National Oil Company, said last year.
Total investment in the upstream sector of the oil and gas sector fell 23 per cent below pre-coronavirus levels to $341bn in 2021, while oil demand continued to rise globally, according to a report by the International Energy Forum (IEF) and IHS Markit last year.
“The investment challenge requires all industry stakeholders to work together to ensure a long-term investment-friendly climate, with sufficient finance available. One that is sustainable and works for both producers and consumers, and developed and developing countries,” Mr Al Ghais said.
The global population is set to rise by 1.6 billion between 2021 and 2045 to 9.5 billion led by non-OECD (Organisation for Economic Co-operation and Development) countries boosting demand for oil, according to the Opec report.
Population growth in the non-OECD region will account for more than 96 per cent of the expected total increase, with the OECD's share expected at less than 4 per cent.
The global working-age population (aged between 15 and 64) is anticipated to expand by 870 million throughout the projection period and urbanisation is forecast to expand further in the coming decades, with 66 per cent of the world’s population projected to live in cities by 2045.
Meanwhile, global gross domestic product is set to increase by 3 per cent on average annually over the period 2021—2045, largely driven by non-OECD countries, according to Opec's report.
“The medium-term economic growth dynamic will be influenced by the outcome of the Covid-19 pandemic, the inflationary trend in connection with financial tightening, and the consequences of the Russia-Ukraine conflict,” the report said. “Towards the end of the medium-term period, GDP growth will settle at 3.1 per cent.”
Within the OECD, economic growth is forecast to average 1.7 per annum while non-OECD countries are expected to expand by 3.8 per annum during the period led by China and India, the world’s top two populous countries.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
What is cyberbullying?
Cyberbullying or online bullying could take many forms such as sending unkind or rude messages to someone, socially isolating people from groups, sharing embarrassing pictures of them, or spreading rumors about them.
Cyberbullying can take place on various platforms such as messages, on social media, on group chats, or games.
Parents should watch out for behavioural changes in their children.
When children are being bullied they they may be feel embarrassed and isolated, so parents should watch out for signs of signs of depression and anxiety
How to get exposure to gold
Although you can buy gold easily on the Dubai markets, the problem with buying physical bars, coins or jewellery is that you then have storage, security and insurance issues.
A far easier option is to invest in a low-cost exchange traded fund (ETF) that invests in the precious metal instead, for example, ETFS Physical Gold (PHAU) and iShares Physical Gold (SGLN) both track physical gold. The VanEck Vectors Gold Miners ETF invests directly in mining companies.
Alternatively, BlackRock Gold & General seeks to achieve long-term capital growth primarily through an actively managed portfolio of gold mining, commodity and precious-metal related shares. Its largest portfolio holdings include gold miners Newcrest Mining, Barrick Gold Corp, Agnico Eagle Mines and the NewMont Goldcorp.
Brave investors could take on the added risk of buying individual gold mining stocks, many of which have performed wonderfully well lately.
London-listed Centamin is up more than 70 per cent in just three months, although in a sign of its volatility, it is down 5 per cent on two years ago. Trans-Siberian Gold, listed on London's alternative investment market (AIM) for small stocks, has seen its share price almost quadruple from 34p to 124p over the same period, but do not assume this kind of runaway growth can continue for long
However, buying individual equities like these is highly risky, as their share prices can crash just as quickly, which isn't what what you want from a supposedly safe haven.
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Stage 2
1. Mathieu van der Poel (NED) Alpecin-Fenix 4:18:30
2. Tadej Pogacar (SLV) UAE Team Emirates 0:00:06
3. Primoz Roglic (SLV) Jumbo-Visma 0:00:06
4. Wilco Kelderman (NED) Bora-Hansgrohe 0:00:06
5. Julian Alaphilippe (FRA) Deceuninck-QuickStep 0:00:08
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
