The secretary-general of the Organization of Petroleum Exporting Countries says the world’s thirst for oil will continue for decades to come and investment in the sector is necessary to meet those needs.
Haitham al-Ghais made his remarks in a speech to the Global Energy Show in Calgary on Tuesday, at a time when oil prices are sagging and experts predict they could fall further later this year.
“Simply put, ladies and gentlemen, there is no peak in oil demand on the horizon. The fact that oil demand keeps rising, hitting new records year on year, is a clear example of what I’m saying,” he said in his speech.
Primary energy demand is forecast to rise by 24 per cent between now and 2050, he said, surpassing 120 million barrels of oil a day. Currently, oil demand is around 103 million barrels per day.
“Meeting this ever-rising demand will only be possible with adequate and timely and necessary investments in the oil industry,” he said, pointing to the need for $17.4 trillion US in investment over the next 25 years.
Praise for Alberta oil and gas
The secretary-general used his speech to compliment Alberta’s oil and gas industry for its ability to grow production over the years, its technological improvements, and its role as a leader in developing carbon capture and storage facilities.
He concluded his address by stating OPEC takes climate change “very, very seriously,” and each of its member countries have signed on to the Paris climate accord.
Still, he criticized net-zero targets by companies and countries as “unrealistic,” “fixated on deadlines” and “detached from reality.”
Instead, he said the world should be focused on reducing emissions and using all forms of energy to meet the needs of the world’s growing population.
In 2024, emissions from the energy sector grew by 0.8 per cent compared to 2023, according to the International Energy Agency, while the global economy expanded by more than three per cent.
In Canada, the federal government is already on pace to miss its 2030 target to cut carbon emissions by at least 40 per cent below 2005 levels by 2030.
Challenging times
The speech comes at a time when the oilpatch is confronting weak commodity prices and many companies are pulling back on investment.
OPEC countries are producing more this year, along with more output from Canada, the U.S. and Guyana. Last month, the Vienna-based cartel agreed to raise output by 411,000 barrels a day in June, speeding up the gradual return of 2.2 million barrels a day.
For context, Canada produces about five million barrels per day in total.
At the same time, global consumption of oil is not rising as initially expected because of slowing global trade.
“Demand is not falling, but we are in a period where demand growth is weak. In fact, if you take out the COVID year of 2020, the global financial crisis of ’08-’09, this looks like it could be the weakest year of growth since 2001,” said Jim Burkhard, global head of crude oil research with S&P Global Commodity Insights, in an interview with CBC News.
Big drop forecasted
North American oil prices are averaging about $65 US per barrel in recent days, but S&P’s latest oil forecast released this week anticipates prices could fall into the high-$40s per barrel later this year.
“We could see a significant difference in price by the end of the year compared with where we are right now. A lot depends on the economy, of course, and the concern about tariffs and OPEC+ can alter their decisions at any time. But right now, on current trends, it looks like there’s going to be a lot more supply relative to demand later this year,” he said.
More than 30,000 people from 100 countries are expected to attend the Global Energy Show in Calgary this week.