OIL

ENERGY DEMAND: SCALES CONTINUE TO TIP IN FAVOUR OF OIL

Global primary energy demand is set to climb further over the next 25 years, rising by 23% between 2024 and 2050. That means consumption will grow from the equivalent of 308 million barrels of oil per day (bpd) to nearly 378 million bpd, according to the latest World Oil Outlook (WOO) by the Organisation of the Petroleum Exporting Countries (OPEC). 

Most of the increase will come from the developing world, led by India, other parts of Asia, Africa and the Middle East. In advanced economies, meanwhile, demand is expected to stay broadly flat or even decline as efficiency gains, slower growth, and climate policies take hold. 

The shape of the energy mix will shift, but not transform, the report forecasts. Oil will remain the single largest fuel in 2050, still accounting for just under 30% of global use, the WOO notes. Gas also expands, and together oil and gas keep more than half of the worldís energy market. Coal, by contrast, steadily loses ground, dropping by over 30 million barrels of oil equivalent a day (boepd). Renewables, particularly wind and solar, grow the fastest, more than quadrupling their role to account for 13.5% of the energy system by 2050. Nuclear, long stagnant, also gains traction, adding around 10 million boepd. 

Electricity demand is where the most dramatic shifts occur. Consumption nearly doubles, soaring from 31,500 terawatt hours (TWh) in 2024 to 57,500 (TWh) by 2050. Developing economies drive three-quarters of this growth, with Asia alone responsible for almost 60%. The expansion is powered above all by renewables: wind and solar generation multiplies more than fivefold, climbing from under 5,000 (TWh) to 26,000 (TWh).

OIL REMAINS A GROWTH STORY

Oil, however, tells a more nuanced story. Demand is projected to climb steadily to nearly 123 million bpd by 2050. In the near term, consumption grows strongly, rising to 113.3 million bpd by 2030, thanks largely to non-OECD economies. These countries add nearly nine million bpd of demand by the end of the decade, compared with just one million in OECD nations. 

Over the long run, non-OECD demand continues to surge, expanding by almost 28 million bpd, even as the OECD sheds more than 8 million bpd. India emerges as the central driver of this growth, adding 8.2 million bpd by 2050. Other Asian economies, the Middle East and Africa also contribute significant gains, while Chinaís demand rises by less than two million barrels, most of it frontloaded in the medium term. 

The sectoral picture underscores the resilience of oil. Transport remains the backbone, accounting for more than half of total demand throughout the outlook. Road vehicles and aviation alone add almost 10 million bpd. Petrochemicals add another 4.7 million bpd. Even as the global vehicle fleet electrifies - with the number of electric cars rising sharply - internal combustion engines still dominate, making up around 72% of the fleet in 2050. 

The industry will require an estimated USD 18.2 trillion in cumulative investment between 2025 and 2050. Most of this, nearly USD 15 trillion, will need to flow into upstream oil and gas to offset natural decline in existing fields and ensure reliable supply. 

Refining also faces a major build-out challenge. Around 5.8 million bpd of new capacity is expected by 2030, concentrated in Asia-Pacific, Africa and the Middle East. But even this will not keep pacewith demand, and by the late 2020s, downstream markets are projected to tighten, raising global refinery utilisation rates. Longer term, almost 20 million bpd of new refining capacity will be required, 70% of it before 2035. 

Global oil trade expands in tandem. Interregional flows grow by nearly a quarter to 2050, with Middle Eastern exports increasingly destined for Asia, the report noted. By mid-century, more than 80% of the regionís crude and condensate shipments are expected to head east, with the Middle EastñAsia trade route alone accounting for half of global oil trade.