The world needs $18.2 trillion in new investments in oil and gas by 2050 to ensure adequate supplies. This is the warning issued by OPEC in the 2025 edition of the World Oil Outlook. However, the International Energy Agency (IEA) still believes that oil demand growth will peak before 2030, indicating that there is no need for such investment.

According to OPEC, global oil demand will reach 123 million barrels per day in 2050, higher than the 105 million barrels per day expected by OPEC this year and the 104.4 million barrels per day expected by the IEA.



The IEA said oil demand has plateaued in some parts of the world, especially in Asia, which has been the biggest driver of demand growth over the past 30 years or so. However, the spread of electric vehicles and replacements for diesel trucks are undermining that demand growth, which is set to peak in Asia.

India has emerged as the next Asian superpower in terms of oil demand growth. However, India’s oil consumption is still much smaller than that of Asian superpowers, and it is unclear whether it will catch up in absolute terms. According to the U.S. Energy Information Administration (EIA), the average daily consumption of Asian superpowers in 2023 will be 16.4 million barrels per day, while India will be 5.3 million barrels per day.

It is also worth noting that, like other Asian giants, India is also very motivated to diversify its energy sources due to its heavy reliance on imports and international oil prices. This is why India has some of the most ambitious energy transition plans, which are not only about energy supply security, but also emissions, and even more.

Therefore, the speed at which global demand will grow remains quite uncertain, especially as Asian electric car manufacturers enter the international market and sell their products at prices far lower than those of local manufacturers in Europe and other countries. Affordability is a big issue for most car buyers. If this issue is resolved, the penetration of electric vehicles may increase significantly, affecting crude oil demand.

So, now is the time to turn to natural gas, also a hydrocarbon that was once called the bridge fuel to a net-zero economy but was quickly demonized as being dirtier than coal, tied to oil and coal, and unacceptable in a low-carbon system for human civilization.

As competition to develop AI projects in the IT industry heats up, global electricity demand will continue to soar. AI is all the rage, and it consumes a lot of electricity. Despite hopes and dreams of being powered by wind and solar installations, big tech companies are looking for deals to secure long-term power supplies from nuclear and gas generators. To be sure, they won’t turn down coal power if it comes to that.

So, globally, oil demand growth may be slowing, but it has not peaked yet and may take longer than the IEA thinks. And, even if it does peak, that does not mean a big drop will follow. As for gas demand, unless big tech companies suddenly decide to abandon their ambitions in the AI race, it will grow, and grow quite strongly. Even without such ambitions, the electrification of the world, according to transition plans, will mean a steady increase in demand, especially for reliable, around-the-clock energy supply.

As for OPEC and the IEA, U.S. Energy Secretary Wright recently said the U.S. may withdraw from the IEA because of its biased demand forecasts, which Wright called "complete nonsense."


Brent crude oil continuous daily chart Source: Yihuitong

At 15:10 Beijing time on July 23, Brent crude oil continued to report US$68.72 per barrel.