Global energy transition cannot happen overnight, says Opec Secretary General at WGS2024

Dubai: The Organisation of the Petroleum Exporting Countries (Opec) expects oil demand to rise by 116 million barrels daily through 2045. And to meet that demand, it requires investments of $14 trillion, or over $600 billion a year, announced the inter-governmental agency’s Secretary General Haitham Al-Ghais.

Al-Ghais, while speaking at the World Government Summit (WGS) in Dubai on Tuesday, said the reason for the sustained demand is that one “cannot just unplug from the current energy system overnight. We have to deal with energy transitions with pragmatism.”

He said that oil represents over 30 per cent of the global energy mix, but it takes work to replace it overnight.

“Energy transitions have to be just, orderly, and inclusive. No one can be left behind,” he said.

Demand for oil to remain bullish

In its monthly oil market report, Opec said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.

Al-Ghais said the global economy is expected to double compared to what it is today by 2045, in line with growth in the global population. “We expect, in our forecast, that the global population will rise by almost 1.5 billion from now to 2045,” said Al-Ghais.

He also emphasised the impact of rapid urbanisation, with an estimated 582 million people moving into new cities worldwide by 2030.

Al-Ghais addressed the political pressure on fossil energy producers, urging consideration for the 650 million people without basic electricity and emphasising the importance of addressing energy poverty in the broader energy discussion.

Role of oil in future economies

Commenting on the role of fossil fuels and oil in future economies, Al Ghaith said, “There are 100 countries in the world that produce oil today, not just the 12 countries in Opec or the 22 countries within the Opec Plus alliance who have been able to develop the resource by the 1992 UN Rio Protocol responsibly.”

He said, “At the same time, that does not exist in a vacuum from environmental concerns. Again, there is no better place on this planet to showcase this than the UAE. The UAE has successfully developed its oil production, but at the same time, they do it in an environmentally friendly way.” The UAE also played a pivotal role in bringing oil companies to the discussion table at the UN Climate Change Summit – COP28, including signing the Decarbonisation Charter.