India to be among global oil demand growth drivers in 2023-2050 – OPEC

SINGAPORE (ICIS)–India is expected be a major driver of global long-term oil demand growth through to 2050, alongside the Middle East and Africa, OPEC said in a report.

• Global oil demand to reach 120.1 million barrels/day in 2050
• Petrochemical, road transportation sectors to be key demand drivers
• Annual average world GDP growth of 2.9% projected for 2023-2050

These regions were identified as the “key sources of incremental [oil] demand in the coming years”, OPEC said in its 2024 World Oil Outlook report released on 24 September.

“India alone will add 8 million barrels/day to its oil demand during the forecast period [2023-2050].”

OPEC comprises 13 oil producing countries led by Saudi Arabia, which is the world’s biggest crude oil exporter.

Global oil demand is expected to increase by almost 18 million barrels/day, or by 17.5%, from 102.2 million barrels/day in 2023 to 120.1 million barrels/day in 2050.

While non-Organisation for Economic Co-operation and Development (OECD) demand is projected to increase by 28 million barrels/day between 2023 and 2050, OECD demand is set to witness a decline.

OECD refers to a group of 38 highly industrialized economies.

The strong projected demand growth in the petrochemical sector, especially in Asia, will raise oil demand from naphtha production by 2.8 million barrels/day by 2050.

The largest incremental demand during the forecast period is projected for the petrochemicals, road transportation and aviation sectors.

Oil demand in these sectors in the long term is set to increase by 4.9 million barrels/day; 4.6 million barrels/day; and 4.2 million barrels/day, respectively.

“Demand projections in the road transportation sector indicate strong growth over the current decade before stabilizing at levels above 50 million barrels/day for the rest of the forecast period,” OPEC said.

“By then, the penetration of EVs [electric vehicles] is set to increasingly play a role.”

The global vehicle fleet is projected to surge by about 71% from 1.7 billion in 2023 to 2.9 billion in 2050 with the fastest growth expected in the EVs segment.

As for refined products, strong long-term demand growth is expected for ethane/liquefied petroleum gas (LPG).

“The larger part of this demand growth relates to the use of ethane as a petrochemical feedstock, mainly in OECD Americas and the Middle East,” OPEC added.

GLOBAL ECONOMIC GROWTH REMAINS ROBUST
Global GDP is projected by OPEC to grow at an average rate of 2.9% per year between 2023 and 2050.

Non-OECD countries are set to lead this growth, expanding at an annual rate of 3.7%, while OECD nations will experience more modest annual growth at 1.6%.

As a result, in absolute terms the global economy is expected to more than double in size from $165 trillion in 2023 to $358 trillion in 2050.

Focus article by Nurluqman Suratman

Thumbnail image: Crude oil tanker Njord DF, 250m length, 44m height, flag Greece, Baltic Sea, 31 August 2024 (Olaf Krüger/imageBROKER/Shutterstock)