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2020 World Oil Outlook 2045: Global energy demand dropped under COVID-19 lockdowns

OPEC (Organization of the Petroleum Exporting Countries) has presented the 14th edition of its World Oil Outlook (WOO) exploring the prospects for the global economy and energy, with a particular focus on oil supply and demand. The researches highlight the impact of the COVID-19 pandemic on the global energy and oil markets, describing 2020 as “one of the most tumultuous periods in the history of oil”. For the first time the outlook extends the WOO-2020 to 2045, providing different scenarios of global energy and oil markets development, particular with regard to the long-term implications of the pandemic and the related economic crisis.
Despite the enormous decline in 2020, global primary energy demand is expected to continue to increase by 72 mboe/d in the period to 2045 – from 289 million barrels of oil equivalent per day (mboe/d) in 2019 to 361 mboe/d in 2045. This represents an average growth rate of 0.9% p.a. over the forecast period, whereby India, China and other developing countries play a key role in increasing energy demand.

According to the report, in 2019 oil accounted for more than 31% of the world's energy needs and is expected to remain the largest supplier to the energy mix to 2045 (27%), ahead of gas (about 25%) and coal (almost 20%). The outbreak of the Covid-19 pandemic led to the sharpest drop in oil demand in modern history – from 99.7 mb/d (million barrels per day) in 2019 to 90.7 mb/d in 2020. However, the experts proceed from the assumption that the demand for oil will recover in 2021 rising to 103.7 mb/d in 2025 and 109.1 mb/d in 2045, with India as largest contributor to this growth.

Road transportation accounted for 45% (44.4 mb/d) of global oil demand in 2019, losing about 5 mb/d in 2020, due to COVID-19 restrictions. However, demand for oil in this sector is expected to continue to grow and reach 47 million barrels per day in 2045. Compared to the 2019 level, the total number of vehicles is expected to increase by approximately 1.2 billion, reaching 2.6 billion by 2045. Electric vehicles will account for approximately 5% in 2030, 13% in 2040 and over 16% in 2045, the experts predict. The aviation sector was most affected by the pandemic crisis, which resulted in a decline in demand for oil by almost 50% in 2020. However, also in this sector the long-term forecasts are optimistic, putting aviation with +2.8 mb/d among the primary drivers of oil demand between 2019 and 2045, after the petrochemicals (+3.7 mb/d), and followed by road transportation (+2.6 mb/d). Although electricity generation is projected to increase by 2.2% p.a. on average over the examined period, this is the only sector where oil demand is going to decline.

If we take a look at OPEC’s forecasts for other energy sources between 2019 and 2045, natural gas is predicted to be the fastest-growing fossil fuel (from 67 mboe/d to 91 mboe/d), and coal will be the only primary fuel for which global demand is going to decrease at the average rate of 0.3% p.a. Despite global trends, coal demand will even increase in some countries; for example, in India it is expected to grow at a pace of 2.6% p.a. on average within the examined period. Solar, wind and geothermal energy hold the position of fastest growing energy sources with forecasts to grow by 6.6% p.a. on average between 2019 and 2045.

The report also makes a prediction regarding the global economy and population. Global GDP is projected to more than double – from around $121 trillion in 2019 to more than $258 trillion in 2045. The world’s population is expected to reach 9.5 billion people by 2045 compared to about 7.7 billion in 2019.