At the presentation of OPEC’s annual oil report in Vienna, Austria, it was projected that global demand will clock 105.6 million barrels per day in 2025, which is 6.9 million barrels per day higher than the global oil demand in 2018.
Mohammad Barkindo, Secretary-General of OPEC, said the oil market for OPEC was shrinking, a factor he blamed on rising supply and fluctuating demand of crude oil.
“Signs of stress have appeared in the global economy, and the outlook for global growth, at least in the short- and medium-term has made OPEC revise its benchmark for global oil demand growth repeatedly over the past year,” he said.
The report highlighted that developing and emerging economies would play a huge role in the oil market outlook, with projections that India’s growing middle-class consumers will need an additional 5.4 million barrels per day to its current usage while China will increase its current quota by 4.4 million barrels.
“India is projected to be the country with the fastest oil demand growth and the largest additional demand,’’ the report stated.
However, North America, Western Europe, Japan, South Korea and Oceania will consume 9.6 million barrels per day less according to the long term forecast. It also anticipates that the 14 nation OPEC countries, will experience a declining demand for their crude oil products until around 2025 when US crude oil output is envisioned to start falling.
India replaced the US in 2013 as Nigeria’s biggest exporter, this is prompted by a shift in crude demand by the US which turned its attention to shale production. As a result, Nigeria suffers a 43.2 per cent drop in crude sales.
This development suggests that for Nigeria to remain fiscally viable, and grow its economy in the short – term, it has to retain India as a customer.
“We have already started seeing a deceleration of growth in the United States. The shale patch in the U.S. is facing a tremendous amount of headwinds as a result of the unprecedented growth that we have seen in the last couple of years,” Barkindo said.
OPEC expects supply from non-OPEC producers to hit a high of 72.6 million barrels per day in 2026 and fall to 66.4 million barrels per day by 2040.
“In the long term, it is OPEC that will be expected to meet the majority of oil demand requirements,” Barkindo said.