The Organisation of the Petroleum Exporting Countries (OPEC) has called for urgent and sustained investment in the global upstream oil sector, warning that a cumulative $14.9tn will be required between 2025 and 2050 to meet projected demand and prevent a future energy crisis.
This investment figure, equivalent to $574bn annually, represents the bulk of the $18.2 trillion in total oil-related investments needed over the 25-year period.
OPEC had projected that $18.2tn investment would be required to meet global oil demand between 2025 and 2050, as it dismissed the notion of a looming peak in fossil fuel consumption as a “fantasy.”
According to the 2025 World Oil Outlook of OPEC, oil demand is projected to rise from 103.7 million barrels per day in 2024 to 116.5 mb/d by 2045 and peaking at around 123 mb/d by 2050, an 18.6 per cent increase over 26 years.
It also noted the need for continued investments in various segments of the sector to meet this demand.
It noted that of the total investment requirement, upstream operations, including exploration and production, are expected to gulp the lion’s share at $14.9tn, or $574bn per year, as producers scramble to ramp up supply. Midstream and downstream investments will require $1.3tn and $2tn, respectively.
“Cumulative oil-related investment requirements to meet projected demand are assessed at $18.2tn over the period between 2025 and 2050.
“This is marginally higher than projected in the WOO 2024, as despite the outlook period being one year shorter, this Outlook has also seen long-term oil demand revised upwards, and liquids supply has followed.
“Total upstream investment requirements make up the bulk of the needed capital expenditure, now projected at $14.9tn, or $574bn per annum. Downstream and midstream investment requirements are projected at $2tn and $1.3tn, respectively,” the report said.
OPEC Secretary-General, Haitham Al Ghais, said continued investments are essential to guarantee future energy security and affordability, especially in the Global South.
“There is no peak oil demand on the horizon,” Al Ghais declared in the report’s foreword. “Efforts to rapidly phase out fossil fuels are unrealistic and disregard energy security, affordability, and socio-economic realities of billions still lacking basic energy access,” he said.
GIK/APA