Despite the global movement towards renewable energy, oil demand is still high. Oil is still expected to be a top commodity in the next two decades. According to the Organization of the Petroleum Exporting Countries (OPEC), oil will remain the world’s top trading energy source, supplying more than 27% of worldwide energy.

In OPEC’s11th edition of the World Oil Outlook, it was found that the demand for oil will continue to rise in the next few years. OPEC’s World Oil Outlook (WOO) is part of the Organization’s commitment to market stability. The publication is a means to highlight and further the understanding of the many possible future challenges and opportunities that lie ahead for the industry. It is also a channel to encourage dialogue, cooperation and transparency between OPEC and other stakeholders within the industry.

The importance of oil:

Oil is currently estimated as one of the most important commodities on Earth today, ranking number one amongst all the metal markets, largely down to its versatile nature and usability. It is expected that demand for it will grow from 95.4 mmbbl per day in 2016 to 111.1 mmbbl per day in 2040, with the global economy growing by an average of 3.5 per cent per year during that time. This performance is a great improvement on 2016, and is in part due to oil exporting nations efforts to stabilize the market. The report details that “Globally, oil demand has been revised upwards by 2.24 mb/d in 2022 compared to the WOO 2016. This revision includes the upward shift to the baseline (+1.2 mb/d) in 2016. In addition, in this year’s WOO, OECD regional oil demand is expected to grow until 2019, before the trend reverses. “

However, while the commodity will continue to grow, this growth will be slow in comparison to the demand for renewable energy. Renewables will see the fastest rate of annual growth, at 6.8 per cent per year, although their overall share of the energy mix is expected to reach 5.4 per cent by 2040 due to lower starting base.

According to OPEC, to meet this oil demand, an overall investment of around US$10.5 trillion would be required across upstream, midstream and downstream operations.

According to Mohammad Barkindo, secretary general of OPEC, “Since publication of the World Oil Outlook, in early November last year, the oil market has undergone significant change and transition. It has been a period where the rebalancing of the global oil market has gathered vital momentum, buoyed by a number of important factors.”

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