More realism enters the global energy discourse

Modelling and forecasting are essential to the energy industry, with multiple stakeholders devoting significant time and resources to having their analysts pour over data and come to conclusions about possible future trajectories.

This naturally prompts robust discussions, which can inform policymakers and investors regarding long-term decisions that are vital to the industry.

However, there has been a recent tendency for some agencies to veer from objective forecasting to ‘wishcasting’ what they would like to see happen in the decades ahead.

The concept of ‘peak oil’ increasingly falls into this category. Since oil first started being drilled for commercial purposes in the 1840s, commentators have predicted a peak in supply. After 140 years of this not coming to pass and new discoveries and technological innovation continually changing production patterns, a subtle shift moved to the notion of ‘peak demand.’ Multiple dates have been given and revised for this.

However, reality and an impartial analysis of the facts always struggle to reconcile themselves with the notion of ‘peak oil.’

Many demographic and economic factors need to be considered in this regard. The global population is expected to rise by 1.5 billion by 2050; the global economy is set to double in size; and urbanisation trends are projected to accelerate.

Given these trends, OPEC’s World Oil Outlook (WOO) 2025 sees global energy demand increasing by 23% to 2050. Global oil demand is forecast to increase to almost 123 million barrels per day (mb/d) and oil is set to retain the largest share of the energy mix. There is no peak in oil demand on the horizon.

It is important to emphasise that given this energy demand growth, all forms of energy will be needed in the future and there is an important role for renewables to play.

For this reason, OPEC Member Countries invest heavily in renewables, with the UAE’s Masdar, Saudi Arabia’s Acwa Power and other OPEC Member Countries leading the way. Additionally, Algeria aims to add significant solar energy capacity by 2030 and there are projects like Kuwait’s Al-Shaqaya Renewable Energy Complex, Venezuela’s El Vigía Solar Park, Nigeria’s solar mini-grid strategy, Iraq’s Gas Growth Integrated Project that combines the production of natural gas, solar energy and improved oil production and a number of solar and wind projects in IR Iran.

We recognise that wind turbines and solar panels are remarkable technologies, however, it is unreasonable to expect more of them than they can deliver. They have an important role to play in future energy pathways, but it is unrealistic for some commentators to suggest that they can meet all global energy demand growth on their own.

Furthermore, energy sources do not operate in silos. Growth for one often stimulates growth in another. Petroleum derived products like resins, polymers and lubricants are necessary for the functioning of wind turbines and solar panels. Their manufacture, transportation, assembly and decommissioning require petroleum powered vehicles and machinery. The electricity grid requires a host of petroleum products from insulation materials for cables to transformer oil.

These facts underscore how important investments in the oil industry will be to meet future demand and account for natural decline rates. The WOO estimates required cumulative investments of $18.2 trillion by 2050. The industry needs an atmosphere conducive to investment, with oil market stability being a vital component thereof. For this reason, OPEC and its partners under the ‘Declaration of Cooperation’, work tirelessly to contribute to stability and a balance between supply and demand.

A further crucial consideration of any future energy pathway is the needs of those who live in energy poverty. It is shocking that in 2025, 2.1 billion people continue to rely on unclean and inefficient fuels for cooking and 666 million do not have access to electricity.

All these realities form the bedrock of OPEC’s long-term forecasting and draw us to inexorable conclusion that oil will continue to be a central component of the energy mix for the foreseeable future. What is encouraging is that governments, policymakers and industry leaders are now taking a more realistic, data-driven view of energy realities.

ADIPEC has always focused on energy realities and OPEC is delighted to once again take part in this year’s event. We welcome the focus on building resilience in today’s systems and scaling intelligent solutions to accelerate inclusive global progress. Inclusivity is key, as together the world charts future energy pathways that ensure nobody is left behind.