Driven by expansion in developing countries, global energy demand is set to increase by 35 per cent by 2040, with investments keeping pace, OPEC said in its new World Oil Outlook 2040.
Primary energy demand is forecast to grow by 96 million barrels of oil equivalent per day (boepd) between 2015 and 2040, up from 276 million to 372 million. This is a growth of 35 per cent compared to the 2015 base year, with an average annual growth rate of 1.2 per cent during the forecast period, the report said.
This growth will be unequally distributed among major regions, OPEC said, with developing countries anticipated to grow at 1.9 per cent per year during the 2015-2040 forecast period, while OECD countries will grow at just 0.1 per cent, and Eurasia will grow at 0.9 per cent. Factors such as population growth, urbanisation rate and expansion in economic activity are expected to play the largest role in growth disparity. India and China are among the largest contributors to future energy demand, the report said.
OPEC expects its energy supply to grow slightly by 2040.
“In terms of crude, it is estimated that OPEC will need to supply an additional 7.7 million bpd in the period 2020-2040,” OPEC Secretary General Mohammad Barkindo said in the report.
“For all OPEC liquids, the figure is 10.5 million bpd. Moreover, the share of OPEC crude in global oil supply is expected to increase from 34 per cent in 2016 to 37 per cent in 2040,” he added.
This is on back of medium-term growth of liquids supply from non-OPEC but a deceleration from 2022 onwards and a decline after 2027 to 60.4 million bpd by 2040, Barkindo said.
Within the energy mix, natural gas will become the largest contributor to future energy demand at a global scale. Its demand will increase by almost 34 million boepd, reaching a level of 93 million boepd by 2040. Its share in the global energy mix is expected to increase by a significant 3.6 percentage points.
Meanwhile, long-term oil demand is expected to increase by 15.8 million bpd, rising from 95.4 million bpd in 2016 to 111.1 million bpd in 2040.
However, average growth is forecast to slow around 300,000 bpd between 2035 and 2040 on the back of anticipated efficiency improvements, a further tightening of energy policies, as well as decelerating GDP and population growth.
Demand in the OECD region is anticipated to show a significant decline of 8.9 million bpd over the forecast period.
A structural shift of economies towards a more service-oriented structure means oil will be facing strong competition from other energy sources.
Light products are expected to satisfy more than half of the long-term oil demand growth, while demand for gasoil/diesel has been revised downward, the report said.
Light products (ethane/liquefied petroleum gas (LPG), naphtha and gasoline) are expected to satisfy more than 50 per cent of global demand growth in the period to 2040; 8.5 million bpd out of a total demand growth of 15.8 million bpd. Demand for middle distillates is anticipated to increase by 6.8 million bpd during the forecast period, while that for heavy products increases only marginally by 0.5 million bpd.
Meanwhile, jet or kerosene is the fastest growing fuel in the outlook and diesel or gasoil remains the most important product category.