OPEC released its 2018 World Oil Outlook (WOO). This year’s report highlights the industry’s various linkages, and considers developments in areas such as the global economy, energy demand, oil supply and demand.
WOO examines the medium and long-term prospects to 2040 for the global oil industry, and analyzes various sensitivities that can impact the petroleum industry in the years ahead.
This year’s publication emphasizes the industry’s various linkages, and considers developments in areas such as the global economy, energy demand, oil supply and demand, both in the upstream and downstream, policy and technology developments, and environment and sustainable development concerns.
Namely, according to WOO, all forms of energies will be required in the future, as ‘it is not about choosing one form of energy over another’.
Nevertheless, oil will still be the fuel with the largest share in the energy mix throughout the forecast period to 2040. As for long-term oil demand has been revised upward for the second consecutive year, with total demand at over 111.7 mb/d in 2040. Nonetheless, there is no expectation for peak oil demand over the forecast period to 2040.
As for total primary energy, it is expected to expand by 33% between 2015 and 2040, driven predominantly by developing countries, which see almost 95% of the overall energy demand growth.
In addition, natural gas witnesses the largest demand growth in absolute terms, and renewables the largest growth in percentage terms. This is confirmed by DNV GL as well, which says that energy from renewables will meet 50% of our energy needs.
Other highlights of the report include the following:
- Demand growth is driven by non-OECD regions, which see a huge increase of around 23 mb/d to 2040;
- Long-term demand growth comes mainly from the petrochemicals (4.5 mb/d), road transportation (4.1 mb/d) and aviation (2.7 mb/d) sectors;
- The majority of the growth continues to be for conventional vehicles, but the long-term share of electric vehicles in the total fleet is projected to expand and reach a level of around 13% in 2040, supported by falling battery costs and policy support;
- Global refinery additions are projected mainly in developing regions, led by the Asia-Pacific and the Middle East, but also Africa and Latin America;
- Fast evolving trade patterns for crude oil and refined products will continue to evolve, driven initially by additional flows from the US & Canada, and in the long-term by the Middle East, mostly attributed to increasing imports to the Asia-Pacific;
- In the period to 2040, the required global oil sector investment is estimated at $11 trillion.