Oil Is Here To Stay – For A While

01 October 2021

OPEC’s new outlook is bullish for oil and tanker markets

Earlier this week, the Organization of the Oil Exporting Countries (OPEC) published its long-term forecast, called “World Oil Outlook 2045.”  The report has projections for the global economy, oil and energy demand, liquids supply and oil refining, as well as related policy and technology matters.  The OPEC economists expect a strong global recovery in the short- to medium term (up to 2026), while the pace of GDP growth will slow in the long-term.  Compared to other forecasters, such as the International Energy Agency (IEA), they are more bullish about oil demand and its role in the energy mix, especially in the next 5 years.

Over the medium to long-term, OPEC sees the market share of solar and wind in primary energy demand grow dramatically, primarily to the detriment of coal.  Solar and wind will be at 10.4% in 2045 (up from 2.5% in 2020).  However, by 2045, oil and gas will still have the largest market share with 28.1% and 24.4% respectively.  If the OPEC projections prove to be on the mark, the staying power of oil, in particular over the next 5 years, will provide a needed boost to the tanker market.

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