What lies at the core of essential products such as toothpaste, deodorant, soap, cameras, computers, gasoline, heating oil, jet fuel, car tires, contact lenses and artificial limbs? The answer is oil. If the resources of oil were to disappear instantaneously, these items would become scarce and the transportation networks, supply chains and energy sources would collapse.
Last year, The Statistical Review of World Energy for 2022 found that fossil fuels made up a remarkable 82% of global energy. This statistic is similar to that of OPEC's latest world oil outlook and it is roughly the same as it was 30 years ago.
With this in mind, it is essential to acknowledge the crucial role that oil and gas still play in enabling people's access to vital goods and services. The need to reduce emissions should not take priority over the need for humans to have comfortable lives. Therefore, OPEC members are investing in projects to cut carbon emissions and move towards renewable energy, such as hydrogen capacity, carbon capture utilization and storage, along with promoting the circular carbon economy.
When thinking about the success of electric vehicles, it is important to note that 12.3% of all new vehicles sold in the US in 2022 were hybrids, plug-in hybrids or battery electric vehicles (BEV). In China, only 19% were BEVS and in the EU, motorised vehicles that use petrol or diesel made up half of all car sales in 2022.
These facts present the world with an important reminder: that millions of people globally rely on oil, and this will continue to be the case for years to come. It is key that we make the necessary investments to meet the rising demand for energy, maintain energy security and affordability, and reduce emissions in line with the Paris Agreement.
The world's population is rising, with the OPEC World Oil Outlook (WOO) predicting it will swell by 1.6 billion people up to 2045 and United Nations figures showing a move to 10.4 billion by 2100. Alongside this, the WOO anticipates energy demand will upsurge by 23% until 2045. Oil consumption is projected to reach around 110 million barrels a day (mb/d) during this period, thereby suggesting oil will remain a prominent part of the international energy system for many years to come – contradicting the earlier statements that the age of oil was over. At present, demand is close to its apex, and is forecasted to rise by approximately 5 mb/d in 2023 and 2024.It is clear that no one energy form can meet the prospective energy needs. Therefore, an "all-fuels, all-technologies and all-peoples" answer is needed. OPEC member nations are ready, able and willing to offer the budget-friendly energy required to satisfy these future requirements, while simultaneously reducing their emissions and helping to put an end to energy poverty.The United Nations has noted that more than 700 million individuals are lacking access to electricity, and almost one-third of the populace is relying upon detrimental, inefficient cooking systems. Life for these people is not about cars, laptops or air conditioners – it is about having basic access to heat and power. To provide reasonable and affordable universal energy access and wipe out energy poverty, oil can and should play a major role in developing countries, a point that the Global South has been repeatedly stressing. Is the Global North taking note?
The world is facing a worrying reality where inadequate investment is going into all energies. In order to sustain oil production, an estimated $12.1 trillion would have to be invested in the next 25 years, or around $500 billion annually. Recently, however, annual levels of investment have fallen far short of that. According to research by OPEC Secretariat, if investments into upstream activities were to cease today, the market deficit for oil would reach 16 million barrels a day in the next five years due to the combination of growing global demand and stagnating supply.The oil industry has helped improve millions of lives, and its continuing role is essential for orderly energy transitions, energy security, and meeting future energy demand. Consequently, it is of utter importance to reverse the current trend of underinvestment in the industry.As the United Nations Climate Change Conference (COP28) in the United Arab Emirates approaches, COP28 President-Designate Dr. Sultan Ahmed Al Jaber has stated that maximum energy with minimum emissions is needed. This will be a challenging task, but one that will certainly require balancing the utilization of all energies to fulfill the world's energy needs. Policymakers must take into account the complex interplay between different energies if they wish to avoid history repeating itself.
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