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Informist, Tuesday, Sep 24, 2024

--OPEC: Global oil demand seen rising to 120.1 mln bpd by 2050 

--Share of global oil supply from OPEC, allies seen up at 52% by 2050

--OPEC: Global oil demand seen rising to 112.3 mln bpd by 2029 

--OPEC: China's oil demand seen rising by 2.5 mln bpd during 2023-50 

--OPEC: India's oil demand seen rising by 8 mln bpd during 2023-50 

 

MUMBAI – India is set to become the biggest contributor to growth in global oil demand between 2023 and 2050 amid an expanding population and continued strong economic growth, the Organization of the Petroleum Exporting Countries said. The share of oil in India's energy mix is expected to increase to 30.7% in 2050 from 25.2% in 2023, it said.

 

India's oil demand is expected to grow by 8 mln barrels per day during the next 27 years to 13.3 mln bbl per day by 2050, the cartel said in its World Oil Outlook 2024 released today. Around 30% of non-OPEC oil demand growth will come from India alone, the report said.

 

"Oil demand in India is set to grow in all major consuming sectors, road transportation constitutes the primary key area where more than half of the overall demand increase is expected to materialise," OPEC said. The second-largest increase in demand is seen in the residential, commercial and agricultural sectors combined, expanding to 2.2 mln bpd in 2050 (in India) from 1.2 mln bpd in 2023, according to the report. 

 

"Combined with improvements in education, healthcare and expanding urban centres, India is set to potentially unlock new growth areas throughout the outlook period," OPEC said. This potential for strong growth in India assumes government support, albeit at a gradually declining rate for key industries such as information technology, pharmaceuticals, manufacturing, and communications technology. Additionally, the growth of large consolidated multinational corporations in India is expected to provide the foundation for dynamic research and development, especially in technologically-driven sectors, it said.

 

While oil demand in India is set to grow in all major consuming sectors, road transportation constitutes the primary key area where more than half of the overall demand increase is expected to materialise. This demand growth will be mainly driven by the significant expansion of the country's passenger car fleet, to over 240 mln in 2050 from less than 50 mln in 2023. Moreover, the number of commercial vehicles is set to more than quadruple during the 27-year period, on the back of strong GDP growth. At the same time, the penetration of electric vehicles will likely remain subdued in India.

 

Total oil demand globally is forecast to grow by 17.9 mln bpd during 2023-2050 to reach a record of 120.1 mln bpd, the cartel said in the report. Most of this growth in demand is seen from non-Organisation for Economic Co-operation and Development countries, at 28 mln bpd between 2023 and 2050, according to the report. 

 

After India, other Asia, Africa, and the Middle East will be the key sources of incremental demand in coming years, the cartel said. Combined demand in these four regions is set to increase by 22 mln bpd between 2023 and 2050. Demand from China is seen rising only by 2.5 mln bpd during the period to 18.9 mln bpd, it said.

 

For OECD countries, growth in demand is expected to contract by 10.1 mln bpd to 35.6 mln bpd by 2050 from 45.7 mln bpd in 2023, the cartel said.
 

In the medium term, OPEC sees global oil demand rising by 10.1 mln bpd to 112.3 mln bpd by 2029, the cartel said. In the non-OECD region, demand growth in the same period is seen rising by 9.6 mln bpd to 66.2 mln bpd between 2023 and 2029, while the OECD region will likely see demand at around 46 mln bpd during the same period, according to the report. 

 

Globally, the largest incremental demand during 2023-2050 is projected for petrochemicals, road transportation, and aviation sectors, OPEC said. It further added that the penetration of electric vehicles in India is likely to remain subdued during the next 27 years, with the large majority of vehicles using internal combustion engines to provide support to strong oil demand growth, OPEC said.

 

In India, natural gas demand is expected to rise by 3.8 mln bbl equivalent of oil per day to 5 mln bbl equivalent of oil per day by 2050. Rising gas demand is the result of higher demand in the power generation sector, as well as the residential and transportation sectors, the cartel said in the report. "The government supports further gasification of the country (city gas distribution), which is helping to reduce the traditional use of biomass for cooking," OPEC said.

 

On the aviation front, demand for jet fuel in India is expected to rise to 900,000 bpd by 2050 from 200,000 bpd in 2023. 

 

"Another specific of the Indian oil market is the relatively high demand for the group of 'other products', such as bitumen, pet coke, lubes and waxes," OPEC said. Most of these products are likely to be used as refinery fuels to expand the road network, and to produce energy-intensive goods such as cement, aluminium and steel, it said. 

 

Growth in global oil supply from non-Declaration of Cooperation countries is seen rising by 7.1 mln bpd to 58.8 mln bpd by 2029, the cartel said. "Non-DoC (Declaration of Cooperation) liquids supply is driven primarily by increases in the Americas, with rising output in the US, Brazil and Canada, but there are also significant increments from Qatar, Argentina and Norway," the report said.

 

Additionally, demand for crude oil from Declaration of Cooperation countries is seen rising to 53.8 mln bpd by 2029, and to 62.9 mln bpd by 2050, the cartel said. In 2023, demand for crude oil from Declaration of Cooperation countries was 50.3 mln bpd. This increase in demand will lead to a rise in the share of global crude oil supply from these countries to 52% by 2050 from 49% in 2023, according to the report.

 

The countries participating in the Declaration of Cooperation are Algeria, Azerbaijan, Bahrain, Brunei, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kazakhstan, Kuwait, Libya, Malaysia, Mexico, Nigeria, Oman, Russia, Saudi Arabia, Sudan, South Sudan, the United Arab Emirates and Venezuela.  End

 

Reported by Taniva Singha Roy and Sandeep Sinha

Edited by Tanima Banerjee

 

 

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