Despite electric cars, oil demand to ‘rise by 16m barrels by 2040’

Mohammad Barkindo, OPEC secretary-general, says crude oil demand will increase by 16 million barrels per day by 2040.

Barkindo — who made no comments on the effect of the presence of new technologies like the electric car on oil prices — made this revelation at the Reuters Global Commodities 2017 Summit, 9 October 2017, London, UK.

Over the past few months, countries in the developed world — in a bid to battle climate change — have said they would ban the use of petrol and diesel vehicles by 2040, giving room for electric cars.

The move is said to spell doom for oil demand as the world turns to electric cars. OPEC however thinks demand will spike.

“The issue of a potential investment shortfall was a recurring theme at last week’s Russia Energy Week conference, with President Vladimir Putin, as well as many oil and energy ministers making reference to the critical investment challenge,” Barkindo said.

“As we have all learned from previous price cycles, such pronounced and long-term declines in investments are a serious threat to future supply.

“But given our projected future demand for oil, with our upcoming World Oil Outlook 2017 expecting demand to reach over 111 million barrels a day by 2040, an increase of almost 16 million barrels a day, the world simply cannot afford a supply crunch.”

He said it was necessary to recognise and respect “the link between long-term security of supply and short-term conditions is critical”.

“Let me assure you that from the perspective of the ‘Declaration of Cooperation’, all participants remain committed to fully achieving its goals and objectives. We will not waiver; we will not tire.

“Our steely and resolute focus remains on reducing inventories, moving the stock overhang to its five-year average and ensuring sustainable market stability in the years and decades ahead.”