India and China will control 37 per cent of the global GDP by 2045, and will also account for a major share of the world’s energy resources, including crude oil, the Organisation of the Petroleum Exporting Countries (OPEC) said on Tuesday.
Speaking to the businessline, OPEC Director (Research Division), Ayed S Al-Qahtani said, “We see enormous economic growth coming from India and China. Going forward, they will constitute the bulk of the oil demand growth. Not only will they command north of 30 per cent of the global economy, butalso a big chunk of the energy resources consumption, including (crude) oil.”
The global oil demand is projected to increase close to 13 million barrels per day (mbd) hitting almost 110 mbd by 2045, OPEC’s World Oil Outlook 2045 report released on Tuesday said, adding that the largest incremental demand is likely to be observed in India at 6.3 mbd, followed by Other Asia (4.7 mdb), Middle East (3.7 mbd) and Africa (3.6 mbd).
The OPEC report was released at the India Energy Week 2023 here.
Oil demand growth
OPEC report projected that non-OECD demand prospects are marked by a strong oil demand growth. In the initial years of the forecast period, this growth will be driven by China. In the later period, India will take the leading role with demand growth in China slowing significantly and even turning to a marginal decline over the last five years of the forecast period.
Besides India, fairly robust growth during this period is also projected for Africa and other Asian countries where economic progress, urbanisation, industrialisation and vehicle fleet expansion will be fastest among all regions.
“This will result in respective demand increases of around 1.4 mbd, 0.8 mbd and 0.7 mbd, for India, Africa and Other Asia, during the 2040–2045 period. Even by 2045, oil demand will still grow at a rate of more than 2 per cent per annum in India and Africa and 1 per cent per annum in Other Asia,” it added.
World oil demand
Al Mahtani, who is also the Editor-in-Chief of OPEC’s World Oil Outlook 2045 report, in a panel discussion said that growth in non-OECD countries is expected to hit more than 23.6 mbd, which will be partially off-set by declines of 10.7 mbd in the OECD.
“Global primary energy demand is expected to increase from 286 million barrels of oil equivalent a day (mboe/d) in 2021 to 351 mboe/d in 2045, a rise of 23 per cent. The drivers of global energy demand are exclusively non-OECD countries, increasing by 69 mboe/d in the outlook period. India alone accounts for 28 per cent, or roughly 19.32 mboe/d, of this expansion,” the report said.
The OPEC report estimates that $12.1 trillion is required over the long term of which $9.5 trillion is needed in the upstream sector, while $1.6 trillion and $1 trillion will be required in the downstream and midstream sectors, respectively.
The reporter is covering the India Energy Week 2023 at the invitation of Indian Oil Corporation.