Oil to remain a key energy source to 2040

The 2017 OPEC World Oil Outlook (WOO) forecasts that total primary energy demand is set to increase by 35% in the period to 2040, with oil remaining the fuel with the largest share in the energy mix throughout the forecast period. Long-term oil demand has been revised upward by 1.7mn b/d compared to the WOO 2016 report, with total demand at over 111mn b/d by 2040. There is no expectation for peak oil demand over the forecast period.

Developing countries will continue to lead demand growth, according to the study, increasing by almost 24mn b/d, to reach 67mn b/d by 2040. Long-term demand growth comes mainly from the road transportation (5.4mn b/d), petrochemicals (3.9mn b/d) and aviation (2.9mn b/d) sectors, with oil demand in the road transportation sector driven by the increasing car fleet in developing countries and declining oil use per vehicle in the OECD region. The car fleet is anticipated to change smoothly over the forecast period. In the passenger car segment, electric vehicles are estimated to represent 12% of the car fleet by 2040.

Non-OPEC liquids supply is forecast to increase from 57mn b/d in 2016 to 62mn b/d in 2022, but in the long-term non-OPEC liquids output is anticipated to see a decline, dropping to 60.4mn b/d by 2040, with US tight oil estimated to peak just after 2025.

The demand for OPEC crude is anticipated to expand to 41.4mn b/d by 2040, while the share of OPEC liquids in total global liquids supply is estimated to increase to 46% by 2040, from 40% in 2016.

Around half of the estimated refining capacity additions are expected in the Asia-Pacific, which is projected to add 9.5mn b/d by 2040. Capacity rationalisation remains a long-term requirement, with some 6–8mn b/d of closures indicated as needed by 2040 if refining regions are to maintain utilisation rates of at least 80%.

Global crude movements are expected to increase by around 6.5mn b/d between 2016 and 2040, mostly supported by Asia-Pacific imports and Middle East exports.

In the period to 2040, the required global oil sector investment is estimated at $10.5tn.

The WOO 2017 report, as well as a comprehensive interactive version, can be accessed at http://www.opec.org/opec_web/en/publications/340.htm