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OPEC Expects Global Oil Demand to Rise to 110 Million Barrels a Day by 2045
Rising Oil Demand Despite Renewable Energy
According to OPEC, global oil demand will see a surge and is expected to reach 110 million barrels a day in the next 20 years. This soaring demand will push the global energy demand up to 23%. The organization affirmed that the oil remains an integral part of the energy mix, and its demand will still be around 29% in 2045. The forecast from the OPEC contradicts the International Energy Agency's predictions that demand for oil will peak before the end of this decade.
Underinvestment in Oil Industry Challenges Energy System Viability
OPEC's Secretary General, Haitham Al Ghais, addressed the inaugural Energy Asia conference held in Kuala Lumpur and stated that global oil demand would rise to 110 million barrels a day by 2045. He added that underinvestment in the oil industry would lead to an "energy chaos" and would challenge the viability of current energy systems. He predicted that until 2030 almost half a million people would move to cities across the world as the global economy continues to expand.
Renewables to Play a Greater Role in Energy Mix
While forecasting the soaring demand for oil, Al Ghais also admitted that renewables would play a greater role in the world's energy mix. He stated that some OPEC member countries are already investing significantly in this area. Al Ghais predicted that gas hydro, nuclear hydrogen, and biomass would expand, but it is clear that oil remains an integral part of the mix.
Current Oil Prices
Currently, Brent crude is trading about 0.92% higher at $74.53 during Asia's afternoon trade. West Texas Intermediate futures are marginally up, trading at $69.70 per barrel.
World Bank Growth Expectations
According to the World Bank, the global growth rate is expected to fall to 2.2% between 2021-2030, which is the lowest in three decades. This rate is lower than the 2.6% growth rate observed from 2011-2021.
With OPEC expecting a surge in global oil demand, newly created businesses should consider the impact of this rising demand on their operations. It is imperative to note that underinvestment in the oil industry could lead to detrimental consequences, thus magnifying the importance of new businesses to consider expanding their energy portfolios. While the Secretary-General of OPEC admitted that renewables would play a more significant role in the world's energy mix, oil remains an essential component. Therefore, newly created businesses must consider these advancements and adapt their strategies accordingly to align with the fluctuating energy market trends.
Furthermore, with the World Bank projecting a slower global growth rate in the next decade, newly created businesses should brace themselves for challenging economic circumstances. Businesses must be proactive in seeking innovative energy-saving strategies and alternative investment sources to remain resilient in the face of a continually fluctuating oil market. The use of renewables should be considered, along with other strategies for mitigating high energy costs associated with oil use. As the energy industry continues to evolve, new business owners must stay abreast of these changes to position themselves strategically in today’s global economy.