BP and OPEC clash over future oil prospects
Energy company BP has published its 2024 energy report, reaffirming its prediction that global oil demand will peak in 2025. This projection is based on two different scenarios that the company has outlined for the future up to 2050, in stark contrast to the more optimistic forecasts of the Organisation of the Petroleum Exporting Countries (OPEC).
Energy scenarios
The first scenario, called ‘Net Zero’, is aligned with the goals of the 2015 Paris Agreement. This scenario foresees a drastic reduction in oil demand, with an expected decline to between 25 and 30 million barrels per day by mid-century. This decline is mainly due to a significant reduction in oil use in land transport, although demand in the petrochemical sector is expected to partially offset this decline.
According to Al Arab, BP also anticipates that global energy demand will be 25% lower in 2050 compared to 2022. Natural gas demand is expected to peak in 2025 and then decline by about 50% by 2050, despite growth in liquefied natural gas (LNG) demand of 30-40%. The company also anticipates that demand for bioenergy will double, while wind and solar energy will experience a fourteen-fold increase by the same year.
In the second scenario, ‘Current Path’, BP bases its predictions on policies and commitments already in place. This scenario suggests that primary energy demand will continue to increase until the mid-2030s before stabilising. It projects a 5% increase in total energy demand by 2050 compared to 2022, along with a significant decrease in oil demand, which would fall by at least 75 million barrels per day. In this scenario, gas demand would increase by about 20% by 2050, with LNG playing a crucial role.
Differences with OPEC
In contrast, OPEC presents a more optimistic view on future oil demand. Haitham Al-Ghaith, OPEC's secretary general, has expressed that a peak in oil demand is not expected in the short to medium term. The organisation forecasts that oil demand could reach 116 million barrels per day by 2045, dismissing the possibility of peak demand before 2030.
This discrepancy between BP and OPEC highlights the different expectations about the future of energy consumption and global oil market dynamics. While BP anticipates a significant decline in demand due to a transition to cleaner energy sources, OPEC projects continued growth driven by increased consumption in developing economies. These differences underline the uncertainty and complexity of the global energy landscape, in which government policies, technological innovation and market fluctuations will play decisive roles in the coming years.
Global context and policy responses
The debate on the future of energy is taking place in a global context characterised by growing resistance to net zero emissions targets. In many developed countries, citizens are expressing concern about the impact these policies could have on their household economies. This has led policy makers to reconsider their energy transition strategies.
In the United States, energy policy faces an uncertain future, especially with the possibility of Donald Trump being re-elected to the presidency. Trump has signalled his intention to repeal climate legislation from the Joe Biden Administration, which could significantly affect the direction of the country's energy policies.
In Europe, the Parliament confirmed Ursula von der Leyen for a second term as president of the European Commission. This decision has been supported by Green MEPs, who strongly support the EU Green Deal and promote ambitious emission reduction targets.
Meanwhile, in China, President Xi Jinping is reinforcing his strategy to lead in export-oriented decarbonisation technologies, seeking to expand his influence in the developing world, amid rising protectionist tensions between the EU and the US.
These divergent perspectives and policies reflect the complex challenges facing the world as it moves towards a sustainable energy future. The need to balance economic growth, energy security and the fight against climate change requires global coordination and innovative solutions. As different regions adopt varied approaches, collaboration and engagement will be crucial to achieve climate goals and ensure a just and efficient energy transition for all.