• Thursday, February 29, 2024
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Global energy demand to soar 23% by 2045, requires $14trn investment

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Global energy demand will skyrocket 23 percent by 2045, requiring 3 million more barrels of oil equivalent per day every year, the latest World Oil Outlook 2023 by the Organization of Petroleum Exporting Countries (OPEC) has shown.

However, for this to be achieved, oil sector investment is expected to hit the total of $14 trillion from now till 2045, or around $610 billion on average per year.

Of the total investment needed, $11.1 trillion is expected to be required in the upstream sector, or an average of $480 billion annually.

Read also: Global energy efficiency must increase over $1.8trn by 2030 to attain net-zero targets – IEA

“Downstream and midstream requirements are estimated at $1.7 and $1.2 trillion, respectively. If these investments do not materialise, it represents a considerable challenge and risk to market stability and energy security,” the report revealed.

“It is vital that these are made; it is beneficial for both producers and consumers,” said Haitham Al Ghais, Secretary General of OPEC.

He said that recent developments have led the OPEC team to reassess just what each energy can deliver, with a focus on pragmatic and realistic options and solutions.

“In this regard, our Reference Case sees oil demand reaching 116 million barrels per day (mbpd) by 2045, around 6 mbpd higher than in the WOO 2022, and with the potential to be even higher,” Al Ghais added.

According to WOO 2023, Africa, Middle East and Asia-Pacific will drive medium-term refinery expansions. Around 6.6 mbpd of refining capacity additions are projected between 2022 and 2028.

“Most of this new capacity will be in the Asia-Pacific (3.1 mbpd), Middle East (1.6 mbpd) and Africa (1.2 mbpd),” the report showed. “Additions in other regions are minor and mostly limited to the expansion of existing refineries.”

In addition, OPEC said that 19.2 mbpd of new crude distillation capacity is required through 2045. “In the long-term (2023–2045), global refining capacity additions are set at 19.2 mbpd (including capacity creep).

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“Similar to oil demand growth, additions are front-loaded, with a slowdown in the rate towards 2045. Around 85 percent of long-term additions are expected in the Asia-Pacific, Middle East and Africa.

“This continued trend of refining capacity migration from developed to developing countries mirror the shifts in regional demand,” OPEC said.

The Asia-Pacific remains by far the main destination for global crude and condensate exports, according to OPEC, total imports are increasing gradually from 23 mbpd in 2022 to 32.6 mbpd in 2045.

This translates into its share of the global interregional trade rising from around 64 percent in 2022 to almost 72 percent in 2045.