Oil to retain largest share of energy mix until 2045: OPEC

Representational image. Source: Reuters

Oil will retain the largest share of the energy mix until 2045 despite a decrease in its share, said Ayed S Al-Qahtani, Director, Research Division, Organisation of Petroleum Exporting Countries (OPEC) on February 7 at the India Energy Week 2023.

“Oil will still dominate the energy mix. However, we will see a drop in the share of oil from 31 percent in 2021 to 29 percent in 2045. Of course, both of them (natural gas and renewables) will increase at the expense of coal,” said Al-Qahtani.

The remarks by the OPEC official come at a time when India is focusing on an energy transition to meet its net-zero targets by 2070.

Natural gas share in the energy mix will increase to 24 percent by 2045 while the share of renewables will rise to 11 percent, he added.

OPEC said that global oil sector requires an investment of $12.1 trillion over the long term. Of the required investment, $9.5 trillion is needed for the upstream, $1.6 trillion for the downstream and $1 trillion in the midstream, the oil-producers group said.

Demand growth

OPEC said India will have the largest incremental oil demand at 6.3 million barrels per day (mb/d) during 2021-27, rising from 4.8 mb/d in 2021 to 11.1 mb/d by 2045.

“There are several drivers leading to this conclusion. India is, and will remain, a country with very dynamic population growth. The population is set to increase by more than 238 million between 2021 and 2045. Strong population growth will drive economic expansion too, which is projected to grow by more than 6 percent p.a. on average during the entire period, remaining robust (above 5 percent p.a.) even towards the end of the forecast period,” the OPEC official said.

The group also said demand growth will be prominent in non-OECD (Organisation for Economic Co-operation and Development) countries compared to the OECD countries.

The aviation, road transportation and petrochemical sectors will be the main contributors to future incremental oil demand, each adding around 4 mb/d between 2021 and 2045, the group said.