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Opec sees greater than anticipated demand for oil by 2022 despite a global push in energy policies promoting cleaner fuels and a rise in technologies such as electric cars, the cartel said on Tuesday.
World consumption will rise from 95.4m barrels a day in 2016 to 102.3m b/d in 2022 –which is an upward revision of almost 2.3m b/d — Opec said in its annual World Oil Outlook report assessing long term trends. Demand will rise to 111.1m b/d by 2040, it said.
The growth rate will decelerate, however, from nearly 1.5m b/d in 2017 to 810,000 b/d in 2022 and 300,000 b/d by 2040.
“The outlook assumes that oil prices will gradually rise and that the global economy will decelerate as a result of lower employment growth coupled with lower labour productivity growth. These assumptions will certainly curtail demand growth,” said Opec.
A shift within developing countries such as China away from oil-intensive heavy industry, energy efficiency policies, fuel switching in road transportation and a proliferation of alternative fuel vehicles will displace crude barrels, Opec added.
Still, oil demand in industrialised nations is expected to grow for another two years before the trend reverses, Opec said. This is a change from previous forecasts which expected OECD demand to peak in 2017.
Opec said that while oil is anticipated to shrink as a proportion of the energy mix — with renewables growing at the fastest rate — it is expected to remain the fuel with the largest share, at just under a third by 2040.
On the supply side, oil from outside of the Opec cartel is expected to grow from 57m b/d in 2016 to 62m b/d in 2022, which is higher than previously expected. Two-thirds of this growth is expected to come from the US alone.
After 2022, however, non-Opec growth begins to slow, tailing off in 2027 at 63.8m b/d, before a further fall to 60.4m b/d by 2040. “The long-term focus for additional liquids demand remains on Opec,” the cartel said.
This means the so-called ‘call on Opec crude production’ will rise by almost 30 per cent by 2040, reaching 41.4m b/d. The cartel’s share of global oil supply therefore increases from 34 per cent in 2016 to 37 per cent in 2040.