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Crude oil is in “decline mode” in the long term, OPEC heavyweight the United Arab Emirates (UAE) says.
“To assume oil is going to be there forever is wishful thinking,” the UAE’s Energy Minister Suhail Al-Mazrouei said at the ADIPEC energy conference, as carried by Bloomberg.
“No matter how much we defend it, it’s in decline mode,” said the official from the UAE, one of the most influential members of OPEC and a major crude oil exporter.
Earlier this week, OPEC presented its annual World Oil Outlook at ADIPEC, in which it forecast that demand for oil would continue to grow all the way through 2045. Oil is expected to retain the largest share in the energy mix, accounting for almost a 29% share in 2045, the cartel said. In OPEC’s view, all major fuel types, with the exception of coal, will see demand growth through 2045. Moreover, OPEC also said that the global oil sector would need a cumulative investment of $12.1 trillion in the upstream, midstream, and downstream through to 2045, equating to over $500 billion each year.
OPEC’s rosier outlook on oil demand is in contrast with projections from other forecasters and analysts who see the early 2030s as the possible time of peak oil demand.
The International Energy Agency (IEA), an advocate of the energy transition and net-zero emissions by 2050, said in its own world energy outlook last week that fossil fuel consumption is expected to peak or plateau within this decade, accelerated by the policy and trade flow shifts following the Russian invasion of Ukraine. For the first time ever, a World Energy Outlook scenario from the IEA based on current government policies and settings has the global demand for every fossil fuel showing a peak or plateau, the agency said in its World Energy Outlook 2022.
Even natural gas, which was previously expected to continue rising, could now join coal and oil in peaking around 2030, according to the IEA’s latest estimates.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.