Global Oil Demand to Remain Above 100 Million Barrels Per Day in 2050: REPORT

Report Highlights

Global energy demand is projected to grow 15% by 2050, with:
- 10% decrease in energy consumption in developed countries
- 25% increase in energy consumption in developing countries
Both renewables and oil and gas play a crucial role in providing this energy to consumers
Renewables will grow the fastest, while coal will decline the most
Exxon expected the global energy mix in 2050 to look like the following:
- 54% oil and natural gas
- 15% hydro, wind, solar, geothermal
- 13% coal
- 10% bioenergy
- 6% nuclear
Fossil fuels will still account for more than two-thirds of the world’s energy mix by 2050
Global electricity demand will nearly double
Electricity demand for transportation will grow by more than 20%
Energy demand for industry will grow by 20%
Solar and wind energy will increase by more than four times in the world’s total energy mix by 2050
Coal will continue to be displaced by other energy sources, such as natural gas
The world’s population is expected to grow from 8 billion in 2023 to 10 billion by 2050
Global oil demand is expected to plateau beyond 2030, remaining above 100 million barrels per day through 2050
If every new car sold in the world in 2035 were electric, oil demand in 2050 would still be 85 million barrels per day – the same as global demand levels in 2010
Under any credible projection or scenario, oil and natural gas remain essential in the world’s energy mix

Investment Needed to Maintain Adequate Oil & Gas Supply

Exxon predicts a strong future for oil and gas markets but warns of a significant investment gap that could see supplies rapidly dwindle and threaten global energy security. It sees oil production declining at about 15% per year – nearly double the IEA’s prior estimates of 8%, reflecting the world’s shift towards unconventional oil and gas reserves, mostly shale and dense rock formations that typically have quicker decline rates.

As a result, a lack of new investment could cause global oil supplies to drop by 15 million bpd per year. At this rate, the world’s oil supply would drop from 100 million bpd to less than 30 million bpd by 2030 – or 70 million barrels short needed to meet everyday demand.

The consequences of such a massive energy supply shortage include an increase in oil prices by 400%. By comparison, oil prices rose 200% during the Oil Embargoes of the 1970s. Within a decade, unemployment rates could potentially reach 30%—higher than the Great Depression of the 1930s, according to the report.

Clearly, the world needs significant new investment in maintaining adequate oil and gas supplies, and any policy that would “keep it in the ground” is not a responsible choice.

Developing Countries to Account for Lion’s Share of Energy Growth

Developing countries will see total energy demand increase by 25%, offsetting the 10% reduction in developed economies worldwide.

Currently, four billion people worldwide (one-half the global population) live below the modern energy minimum, far below modern standards of living, which require reliable energy for housing, jobs, infrastructure, and transportation.

To meet the “modern energy minimum” and help break the poverty cycle, countries must consume 50 million British thermal units (50MMBtu) per capita to help:

Provide universal access to clean cooking fuels
Provide universal access to electricity
Eliminate abject poverty

Two billion people currently rely on harmful cooking fuels, 750 million people lack access to electricity, and 700 million live in extreme poverty defined as less than $2.15 per day.

Countries like China and India will fuel growing global demand as they look to coal, oil, natural gas, renewables, and other sources to provide the energy necessary to grow their economies and provide for their citizens.

Projections vs. Scenarios

Exxon’s 2050 outlook is a projection based on current trends, unlike the International Energy Agency’s (IEA) net-zero scenario, which works backwards from a hypothetical outcome to identify factors needed to achieve such an outcome.

It is important to note that the IEA has acknowledged the world isn’t currently on a net-zero trajectory.

Additionally, no particular pathway can be accurately predicted, given the dynamic nature of our world’s global systems and the many uncertainties that exist, such as energy prices, technological advances, and government policies.

The World Needs More Canadian Energy

If we look to based projections that rely on current trends rather than impractical scenarios with no clear pathway, it is abundantly clear that oil and natural gas will play an essential role in our global energy mix for decades.

Canada, a major oil and natural gas exporter with the potential to do more on global markets, is well positioned to supply the world with the energy it needs --- for as long as it needs. Our democratically produced energy provides stable and reliable supplies for our allies and trade partners, a relationship that is increasingly important as many Western nations look to diversify trade away from autocracies towards democracies with shared values.

The shift towards friendlier supply chains is a huge opportunity for Canadians to support an industry that forms the bedrock of our economy and prosperity. From supporting 900,000 jobs nationwide to accounting for about one-third of our exports to generating tens of billions of dollars in revenues for our governments, Canada would be a much different place without our job-creating, wealth-generating oil and gas sector.

As long as the world needs oil and gas, Canada should produce it, supporting Canadian governments and families from coast to coast.