The Organization of the Petroleum Exporting Countries (OPEC) called on Monday for trillions of dollars to be invested in the oil sector, projecting a surge in fossil fuel production through 2045.
With global oil demand projected to increase from almost 97 million barrels a day in 2021 to around 110 million barrels a day in 2045, the global petroleum sector will require a cumulative investment of $12.1 trillion, the cartel forecasted in its 2022 World Oil Outlook.
That’s equivalent to more than $500 billion each year, according to the outlook, released on Monday at the Abu Dhabi International Petroleum Exhibition and Conference.
The outlook, which assesses medium- and long-term prospects for worldwide energy industries, “underscores the increasingly complex nature of the global oil and energy industries,” OPEC’s secretary general, Haitham Al Ghais, said in a statement.
“It is a challenging environment, and one that requires expert analysis to help us navigate both the challenges and opportunities ahead,” he added.
The world economy is expected to more than double in size by 2045, while the population is projected to increase by 1.6 billion at that point, according to the outlook.
Alongside those economic and population surges, the report forecasts that global energy demand will increase by 23 percent.
While the report acknowledges that “all forms of energy will be needed to address future energy needs,” it predicts that oil will remain the biggest contributor to the global energy mix — accounting for a 28.9 percent share in 2045.
Fossil fuels are collectively expected to make up a 69.6 percent share of the energy mix by that time, down from 80.2 percent today.
Nonetheless, the outlook projects that renewables — mainly solar, wind and geothermal — will expand “significantly faster than any other source of energy,” by about 7.1 percent each year.
All major types of fuel, aside from coal, are expected to grow, according to the report.
As far as oil in particular is concerned, the outlook projects that countries outside the Organization for Economic Cooperation and Development (OECD) will drive oil demand growth.
These countries will expand their oil demand by nearly 24 million barrels per day through 2045, while OECD countries will reduce their demand by more than 10 million barrels per day, the outlook found.
The OECD includes 38 member countries, most of which are considered to be among the world’s highest-income economies and most developed nations.
India is poised to be the single largest contributor to incremental oil demand, adding about 6.3 million barrels per day to its needs, according to the report.
Stressing that this global rise in oil demand will require a significant, $12.1 trillion investment through 2045, the report acknowledges that this sum is slightly higher than previous projections.
“Chronic underinvestment into the global oil industry in recent years, due to industry downturns, the COVID-19 pandemic, as well as policies centered on ending financing in fossil fuel projects, is a major cause of concern,” Al Ghais wrote in a foreword to the report.
The OPEC secretary general also accused global policymakers of broadcasting a misleading narrative at last year’s United Nations Climate Change Conference in Glasgow.
“It was a time when the narrative around the energy transition appeared to be focused on the question: are you for, or against fossil fuels?” Al Ghais stated.
“To OPEC, this question offered a false dichotomy,” he said, stressing that this narrative limited options and “placed some energy sources on the sidelines.”
Although Al Ghais said that he and his OPEC colleagues recognize “the urgent need to reduce emissions,” he warned against “a linear trajectory from oil and other fossil fuels to renewables.”
OPEC, according to Al Ghais, remains “committed to helping ensure the oil industry has a sustainable and stable environment that enables investments to be made.”
“This can be viewed in its actions over the past year in terms of reinstating production adjustments,” Al Ghais continued.
OPEC and its allies agreed to a 100,000-barrel-a-day increase in oil production for September.
But to the disappointment of the Biden administration and Western governments, the group recently declared that it would reduce production by 2 million barrels per day beginning in November.
“No one entity can act alone,” Al Ghais wrote in the report.
“The investment challenge requires all industry stakeholders to work together to ensure a long-term investment-friendly climate, with sufficient finance available,” he added.
This story was updated at 1:19 p.m.