The Secretary-General, Organization of the Petroleum Exporting Countries, OPEC Mohammad Barkindo has said that oil remains relevant for over a long period of time; Forecasting an increase in oil demand by around 14.5 million barrels a day between now and 2040 to approach close to 112 million barrels a day.
Delivering his keynote speech at the Committee of the World Energy Council in Madrid, from the perspective of oil and gas, Barkindo said that the fact remains that oil and gas will remain central to supplying the growing global population with the critical energy it needs in the decades ahead. This invariably relegates every other forecast that oil and gas will soon go out of relevance.
“Of course, you may say to me, “well you are the OPEC Secretary General.” But I am also a realist. I do not see any outlook predicting that other energies will come close to overtaking oil and gas in the decades ahead.
“In terms of oil, specifically, I think the key message from our Outlook is that there is no doubt that oil will remain a fuel of choice for the foreseeable future”.
Barkindo said OPEC sees oil demand increasing by around 14.5 million barrels a day between now and 2040, to reach close to 112 million barrels a day.
He noted that for the second consecutive year, OPEC has raised its oil demand numbers for 2040.
According to him, in terms of sectors, transportation has a major incremental demand, stressing that the expectation for an increase on the sector is more than 8 mb/d, mostly in the road transportation sector, which sees a growth of 4.1 million barrels a day.
Speaking further, Barkindo noted that the growth in demand is driven by the expected increase n the total vehicle fleet for passenger and commercial vehicles. He it projected to increase by over 1.1 billion vehicles to hit close to 2.4 billion by 2040.
The OPEC Secretary General hinted that OPEC said it is important to underscore that the majority of the growth continues to be for conventional vehicles.
Stating that the OPEC sees the majority of the growth to be for conventional vehicles, Barkindo noted that the Organisation does not see the long-term share of electric vehicles in the total fleet expanding and reaching a level of around 13% in 2040, supported by falling battery costs and policy support; Adding that the figure for all alternative fuel vehicles is 18%.
Stating that figure is certainly an impressive expansion for electric vehicles, Barkindo noted that the levels were well below 1% in 2017 and it does need to be placed in the context that conventional vehicles, including hybrids, are still expected to make up 82% of the vehicle fleet by 2040.
Taking cognisance of various sensitivities that could shift these numbers, noted that conventional vehicles will remain the mainstay of the road transportation sector, adding that there are clearly possibilities to further improve the efficiencies of these engines and the fuels they use.
“It is also important to note the expected oil demand growth in the petrochemicals sector, which for the first World Oil Outlook sees more growth than in the road transportation sector over the forecast period to 2040”.
“Global demand in this sector is estimated to expand by 4.5 million barrels a day by 2040. The largest increase is projected for developing countries, most notably Asian countries and OPEC Member Countries, driven by demand for petrochemical products and the availability of feedstock in these regions”.