OPEC sees strong long-term oil demand

Global oil demand is expected to remain robust in the long term and the recent Saudi reversal of production capacity expansion shouldn’t be read as a view of falling demand, OPEC Secretary General Haitham Al Ghais told Reuters on February 13.

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“First of all, I want to be clear I cannot comment on a Saudi decision … but this is in no way to be misconstrued as a view that demand is falling,” Al Ghais told the newswire on the sidelines of a summit in Dubai.

At the end of last month, Saudi Arabia surprised the oil market by announcing a shift in production capacity strategy. State oil giant Aramco said it was ordered by the Kingdom’s leadership to stop work on expanding its maximum sustainable capacity to 13 million barrels per day, instead keeping it at 12 million bpd.

Saudi Arabia’s decision to abandon the expansion plans is a result of the energy transition, Saudi Energy Minister, Prince Abdulaziz bin Salman, said earlier this week.

OPEC’s Al Ghais said that the cartel stands firmly behind its latest long-term outlook on oil demand from October, when OPEC raised significantly its long-term demand estimate and now expects global oil demand at around 116 million bpd in 2045, up by 6 million bpd compared to the previous assessment from 2022.

In its latest annual World Oil Outlook, OPEC expects global oil demand to increase by more than 16 million bpd between 2022 and 2045, rising from 99.6 million bpd in 2022 to 116 million bpd in 2045.

“We stand by what was published in our latest outlook we firmly believe that it is robust,” Al Ghais told Reuters today.

“If anything, changing narratives we are seeing now … a lot of countries in the world turning back and slowing down and rethinking their net zero goals … that will create further long-term demand for oil,” OPEC’s secretary general said.