Opec raises 2050 oil demand outlook amid expansion of global economies

Long-term demand for oil is forecast to surge by 18.5 per cent to reach 123 million barrels per day by 2050

Dora oil refinery in Baghdad. Oil demand is expected to remain strong, driven by the transport sector. AFP

Opec has raised its forecast for world oil and energy demand for the medium and long term but cut oil demand projections for the next four years on China slowdown.

Global oil demand is projected to expand by nearly 19 per cent to reach 123 million barrels per day by 2050, Opec said on Thursday in its World Oil Outlook 2050 report.

In the medium term, oil demand is projected to increase by 9 per cent to 113.3 million bpd by 2030, from 103.7 million bpd in 2024.

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Overall energy demand in the long term is expected to increase by 23 per cent to reach 378 million barrels of oil equivalent per day by 2050, the oil producers group said.

However, it reduced its oil demand forecast for next four years on Chinese demand concerns.

This will be driven by “expanding economic growth, rising populations, increasing urbanisation, new energy-intensive industries like artificial intelligence, and the need to bring energy to the billions without it”, Haitham Al Ghais, secretary general of Opec, said.

The US withdrawal from the Paris Agreement is also expected to result in higher demand for hydrocarbons, in general, and oil and gas, in particular.

The global population is expected to reach 9.7 billion by 2050, from 8.2 billion in 2024, with the working age population set to increase by 800 million over the same period to reach about 6.1 billion.

The global urbanisation rate is also expected to rise to 68 per cent from 58 per cent during the period, resulting in about 1.9 billion people moving to cities by 2050, Opec said.

The world economy, meanwhile, is set to more than double in size to $358 trillion by 2050, with global average income expected to rise during the period, according to Opec.

The Vienna-based organisation, however, cut world oil demand forecasts for 2026, 2027, 2028 and 2029 in its 2025 outlook versus last year's report.

It projected next year's world oil demand at 106.3 million bpd, while in its previous report it was 108 million bpd. For 2027, it is 107.9 million bpd, down from 109.6 million bpd in last year's report. For 2028, world demand has been lowered to 109.8 million bpd from 111 million bpd, and for 2029, it is 111.6 million bpd versus 112.3 million bpd projected last year.

India, Africa and Middle East to lead demand growth

Countries outside the Organisation for Economic Co-operation and Development, including India, Africa and Middle East states, are projected to lead the oil demand growth for both medium and long-term forecast periods.

The non-OECD oil demand during the long term is projected to increase by almost 28 million bpd, while OECD oil demand is set to witness a decline of 8.5 million bpd.

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Combined demand in India, other Asia, the Middle East and Africa is set to increase by 22.4 million bpd between 2024 and 2050, with India alone adding 8.2 million bpd, the report said. China’s oil demand is projected to increase by less than 2 million bpd over the same period.

Road transport and petrochemicals to play key role

Road transport, petrochemicals and aviation are expected to play a key role in boosting demand for oil. The transportation sector accounted for more than 57 per cent of global oil demand in 2024 and is projected to retain this share over the entire forecast period. A significant demand increase of 4.7 million bpd is also projected in the petrochemicals sector.

“Oil underpins the global economy and is central to our daily lives,” Mr Al Ghais said. “There is no peak oil demand on the horizon.”

Opec+ countries have been boosting production since April in anticipation of higher demand after curtaining production for several years.

The group will boost production by 548,000 bpd for August, it said last week, after increasing output by 411,000 bpd for each of May, June and July. The group also approved an increase of 138,000 bpd in April.

“You can see that even with the increases for several months, we haven’t seen a major build-up in inventories, which means the market needed those barrels,” Suhail Al Mazrouei, the UAE’s Minister of Energy and Infrastructure, said in Vienna on Wednesday.

“What we want is stability and you cannot be short-sighted just by looking at the price. We need the price to be right for investments to happen,” he said, adding that countries with big oil reserves were still not investing enough.

The UAE will also be able to boost its oil production capacity to 6 million bpd after 2027 if markets require, Mr Al Mazrouei told reporters on Thursday in Vienna. The UAE has previously said it targets capacity of 5 million bpd.

Boosting investments in oil sector

Mr Al Ghais also underscored the importance of boosting investments in the oil sector, with investment requirements of $18.2 trillion until 2050, up from last year's projection of $17.4 trillion.

“It is vital that these investments are made for consumers and producers everywhere, as well as for the effective functioning of the global economy at large,” Mr Al Ghais said.

Oil markets remained volatile this year amid US President Donald Trump’s tariff plans and the Israel-Iran conflict.

Crude prices started the year strongly. The closing price of Brent, the benchmark for two-thirds of the world's oil, peaked at more than $82 a barrel on January 15, while West Texas Intermediate, the gauge that tracks US crude, hit almost $79 per barrel on that day.

However, demand concerns, a slowing global economy and less-than-stellar growth in China, the world's biggest crude importer, have weighed on crude prices this year.

Mr Trump’s push to impose hefty tariffs on trade partners has been the biggest driver of declining oil prices.