OPEC stands by oil demand growth despite geopolitical uncertainties
Oil demand will continue to grow to 123 million barrels per day by 2050, according to His Excellency Haitham Al Ghais, OPEC Secretary General. He said there are no significant indications of demand destruction as a result of the current geopolitical upheavals.
Speaking at the St Petersburg International Economic Forum, H.E. Al Ghais said OPEC was maintaining its forecast for oil demand growth of 1.2 million barrels per day this year, despite heightened tensions in the Middle East and concerns surrounding the Strait of Hormuz, which has greatly limited the movement of oil and gas supplies. “Despite all the commentary out there that oil demand is declining, we have not registered signs of that yet,” he said, adding that OPEC continues to see robust growth in global consumption.
H.E. Al Ghais’s comments come at a time when the energy markets are navigating an increasingly complex landscape. Escalating geopolitical tensions, uncertainty over global economic growth and accelerating energy transition policies have fuelled debate over the future trajectory of oil demand. But OPEC remains convinced that oil consumption growth will continue in the years ahead.
The organisation’s position is consistent with a message the OPEC Secretary General has emphasised in previous interviews with Energy Connects: that the world will continue to require significant volumes of oil and gas for decades, even as renewable energy capacity is expanding.
Investment remains critical
A central theme of H.E. Al Ghais’s remarks was the need for continued investment across the oil industry. He warned that short-term geopolitical events should not distract policymakers and investors from the longer-term challenge of ensuring adequate supply. He projected that oil would retain 30% of the energy mix leading up to 2050, and that the oil and gas industry would need $7 billion a year in investments.
The issue has become a recurring concern for OPEC. The organisation has consistently argued that underinvestment in projects risks creating supply shortages in the future, while increasing market volatility.
OPEC raises output for fourth consecutive month
H.E. Al Ghais described regional conflicts and disruptions as “one-off events” that should not alter long-term investment strategies. His comments reflect OPEC’s broader view that investment decisions should be guided by structural demand trends rather than temporary market shocks.
At the 41st OPEC and non-OPEC Ministerial Meeting, members reaffirmed their objectives to sustain a stable oil market. To achieve this, seven OPEC+ members, which include Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, are increasing output to the tune of 188 thousand barrels per day, with production scheduled to begin in July 2026.
Unsurprisingly, the biggest production increments will come from Saudi Arabia and Russia, which will increase supply by 62 kilobarrels per day each.
In a press statement, the members said they will meet again on 5 July to review market conditions and oil production levels.
Although OPEC remains bullish, not all industry commentators share its optimism. Some analysts have pointed to weaker industrial activity in China, reduced refinery margins and slower economic growth in parts of Europe as indicators that oil demand growth could slow.
Demand outlook
However, major forecasting agencies continue to project consumption growth, albeit at different rates. The US Energy Information Administration (EIA), for example, projected oil demand to grow by an average of 200,000 barrels per day this year. This is down from the EIA’s projection of 1.2 million barrels per day in its February outlook. The International Energy Agency, on the other hand, said in its May 2026 outlook that global oil demand would contract by 1.3 million barrels per day less than their pre-war forecast.
OPEC's desire for ongoing investment is directly related to its ability to retain confidence in future demand. H.E. Al Ghais contends that maintaining sufficient oil supplies is still crucial for both energy security and economic stability as the world's energy demand increases. “We need to invest well ahead of time to be prepared for the demand that we see in the future,” he said.
