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OPEC Warns Net Zero Push Endangers Global Energy Security

  • OPEC general secretary Haitham al-Ghais criticizes calls to halt investments in new oil projects, labeling it an "extremely risky narrative."
  • Amid contrasting views with the IEA, OPEC's latest oil outlook expects global oil demand to rise until 2045, reaching 116m barrels per day.
  • With an anticipated decline in global output by the early 2030s, OPEC predicts its oil market share will increase from 34% to 40% by 2045.
OPEC

Climate action to reach net zero undermines investment in the oil sector and jeopardises global energy security, warned OPEC.

General secretary Haitham al-Ghais took aim at forecasters predicting a drop-off in oil demand this decade, with the cartel engaged in a protracted war of words with the International Energy Agency over investments in oil and gas projects.The climate agency has urged countries to stop new fossil fuel investments to reach net zero emissions by 2050, and to achieve the goals of Paris Agreement of sustaining global temperature rises to well below two degrees.

Al-Ghais considered this to be an “extremely risky narrative,” according to remarks reported by news agency Reuters, with OPEC instead hiking demand expectations in its latest annual oil outlook report.

Speaking yesterday at the publication’s launch in Riyadh, Saudi Arabia, he said: “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.” 

This follows moves by OPEC and its allies including Russia (OPEC+) to cut more than five million barrels per day out of global markets to prop up crude prices — with investors now fearing supply shortages, helping to drive rallies across major benchmarks.

Brent Crude and WTI Crude prices climbed more than 25 per cent during the last quarter, with both benchmarks currently priced at $87.18 per barrel and $85.35 per barrel respectively.

OPEC has now raised its predictions for global oil demand over the medium term, estimating a rise from 102m to 110.2m barrels per day over the next five years.

Meanwhile, the expectations outlined in last year’s report, of oil demand reaching a plateau after 2035, have been ditched.

Instead, OPEC anticipates demand to continue rising until 2045 and climb to 116m barrels per day, 6m barrels per day more than it predicted last year.

This demand growth will be led by China, India, other Asian nations, and Africa and the Middle East.

Its forecasts contrast with IEA predictions that coal, oil and natural gas consumption could peak before 2030.

OPEC also expects its total share of the oil market to rise from 34 percent to 40 percent by 2045, with output from the rest of the world declining in the early 2030s.

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  • Mamdouh Salameh on October 10 2023 said:
    OPEC+ the most influential player in the global oil market could afford to treat the notion of net-zero emissions as a myth and could equally afford to ignore calls by the IEA to halt investments in oil and gas in order to achieve net-zero emissions by 2050 since net-zero emissions will never be achieved in 2050 or 2100 or ever.

    By projecting yesterday in its Annual World Oil Outlook (WOO) that the global oil demand will rise to 116.0 million barrels a day (mbd) between 2022 and 2045, OPEC has smashed to smithereens the IEA’s projection of peak oil demand by 2030.

    And while the IEA expects oil demand to slump to just 400,000 barrels a day (b/d) in 2028, OPEC expects demand to rise from 99.6 mbd in 2022 to 110.2 mbd by 2028, up by 10.6 mbd. OPEC also expects its total share of the oil market to rise from 34% to 40% by 2045 with output from the rest of the world declining in the early 2030s.

    After all, the last three barrels produced in the world will come from three regions of the world: the Gulf region, Venezuela’s Orinoco Belt and Russia’s Arctic.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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