The Organization of the Petroleum Exporting Countries (OPEC) has issued a stark warning: the world needs to significantly ramp up investment in oil production or face a severe energy crisis. Their newly released 2025 World Oil Outlook projects a substantial increase in global oil demand, rising from 103.7 million barrels per day (mb/d) in 2024 to a peak of approximately 123 mb/d by 2050. To meet this escalating demand, OPEC estimates a staggering $18.2 trillion in total oil-related investments will be required between 2025 and 2050. The lion’s share of this investment, a colossal $14.9 trillion or $574 billion annually, must be directed towards upstream operations, encompassing exploration and production. The remaining $3.3 trillion is earmarked for midstream ($1.3 trillion) and downstream ($2 trillion) activities. This represents a slight increase from the 2024 outlook, driven by upward revisions in long-term oil demand projections.
OPEC’s Secretary-General, Haitham Al Ghais, emphasizes the criticality of sustained investment to ensure future energy security and affordability, particularly for developing nations. He dismisses the notion of an imminent peak in oil demand as a “fantasy,” arguing that efforts to rapidly phase out fossil fuels are unrealistic and fail to consider the energy needs of billions who still lack basic access. The report highlights key drivers of this projected demand growth, including population expansion, increasing urbanization, and the rise of energy-intensive technologies such as artificial intelligence and cloud computing. The outlook predicts a significant shift in global urbanization, from 57% in 2024 to 68% by 2050, with developing regions, especially Africa and Asia, leading this transformation.
The report details the geographical distribution of upstream investment needs. Initially, North America (primarily the US and Canada) will command the largest share, requiring nearly $250 billion annually due to high development costs and their significant contribution to global liquids production. However, this dominance is expected to shift over time towards OPEC and its allies within the Declaration of Cooperation (DoC). The DoC’s share of global upstream spending is projected to increase from 25% in 2025 to 40% by 2050, with annual investments rising from $120 billion to nearly $240 billion. Other non-OPEC producers (excluding the US and Canada) will also see their spending increase, albeit at a slower pace, from $90 billion to just under $150 billion annually during the same period.
This optimistic outlook for oil demand stands in stark contrast to projections by organizations like the International Energy Agency (IEA), which anticipates peak oil demand before 2030 due to the increasing adoption of clean energy technologies. Al Ghais criticizes such forecasts, labeling them as politically motivated and detached from the energy realities of the developing world. He argues that many net-zero emission timelines disregard the feasibility and impact on developing economies, reiterating the impracticality of swiftly phasing out oil and gas.
The OPEC report underscores the vital role of oil in supporting industrialization and economic growth, particularly in developing countries striving to overcome energy poverty. The increasing urbanization trend is viewed as a catalyst for both improved energy access and industrial expansion. The report emphasizes the link between urbanization and industrial growth, particularly in economies grappling with energy poverty, further reinforcing the projected long-term demand for oil. This perspective challenges the narrative of a rapid transition away from fossil fuels, presenting a more nuanced view of the global energy landscape.
As the global investment landscape shifts towards oil-rich regions, countries like Nigeria are strategically positioning themselves to capitalize on this long-term demand. With substantial reserves of both crude oil (over 37 billion barrels) and natural gas (209 trillion cubic feet), Nigeria aims to attract significant investment into its oil and gas sector, leveraging these resources to fuel industrialization and economic development. This highlights the strategic importance of oil-producing nations in meeting future energy demands and the potential for economic growth within these regions. The report serves as a call to action for increased investment in the oil sector, emphasizing its continued relevance in the global energy mix, despite the push towards renewable energy sources.
