The Organization of the Petroleum Exporting Countries (OPEC) has released its latest World Oil Outlook (WOO) 2025, a document that projects global energy trends through to 2050. The report provides both a Reference Case and alternative scenarios to reflect the uncertainties surrounding technology, economic growth, and climate policy. For investors, governments, and the energy industry, the document is not only a forecast but also a roadmap of competing futures where oil may remain indispensable or face steeper challenges.
This article unpacks the core assumptions, examines the scenarios outlined by OPEC, and explores the implications for the oil industry, the global economy, and the energy transition.
Foundational Assumptions
At the heart of the WOO are long-term demographic and economic projections that shape OPEC’s understanding of future energy demand.
Population Growth
OPEC assumes the global population will increase by 1.5 billion people, from 8.2 billion in 2024 to 9.7 billion by 2050. Almost all this growth occurs in developing economies, particularly Africa, India, and Other Asia. These regions will also see a dramatic expansion of the working-age population, with an additional 805 million people entering the labor force. This demographic momentum is a central driver of future consumption, energy use, and urban infrastructure needs.
Urbanization and Lifestyle Shifts
By 2050, 1.9 billion more people will live in cities, lifting the global urbanization rate from 58% to 68%. Urban lifestyles are generally more energy-intensive, increasing demand for electricity, mobility, and industrial goods. OPEC sees this as a structural force sustaining oil and gas demand, even as renewables expand.
Economic Expansion
The global economy is forecast to more than double in size, from $171 trillion in 2024 to $358 trillion in 2050 (2021 PPP terms). Growth is uneven: non-OECD nations will average 3.7% annual growth, while OECD economies will grow at 1.5%. India alone accounts for more than a quarter of total global growth through 2050.
Energy Demand Trajectory
Total primary energy demand is projected to rise 23% by 2050, reaching nearly 378 million barrels of oil equivalent per day (mboe/d). Oil and natural gas together retain over 50% of the mix, with oil just under 30% and gas around 22%. Renewables grow strongly to capture 13.5%, but coal’s share declines substantially.
Policy and Climate Assumptions
OPEC acknowledges climate policy as a “wild card.” While net-zero ambitions remain strong, the WOO points to policy fatigue and political backlash in parts of the developed world. Affordability, competitiveness, and energy security are reasserting themselves as central policy concerns, and OPEC highlights the U.S. withdrawal from the Paris Agreement as emblematic of shifting political winds.
The Reference Case: Steady Oil Growth
In OPEC’s central projection, oil demand continues to grow, albeit at a slowing pace:
- Demand rises by almost 20 million barrels per day (mb/d) between 2024 and 2050, reaching nearly 123 mb/d.
- Demand growth is concentrated in India (+8.2 mb/d), Other Asia, the Middle East, and Africa.
- OECD demand declines by 8.5 mb/d, underscoring the shift in consumption patterns from mature to emerging markets.
Even by 2050, oil remains the largest single fuel in the global mix, reflecting its entrenched role in transport, petrochemicals, and heavy industry. Meeting this demand requires enormous investment: OPEC estimates global oil industry capital requirements at $18.2 trillion by mid-century, spanning upstream, midstream, and downstream segments.
Alternative Futures: Divergent Scenarios
Recognizing uncertainty, OPEC includes two additional scenarios in its 2025 Outlook.
1. Technology-Driven Scenario (TDS)
This scenario assumes an accelerated energy transition, with rapid adoption of electric vehicles, efficiency gains, renewables expansion, and carbon capture technologies.
- Oil demand peaks earlier and diverges significantly from the Reference Case after 2035.
- By 2050, demand is 16.7 mb/d lower than in the Reference Case, at under 107 mb/d.
- Non-fossil fuels capture nearly half the energy mix (46%).
The implication: in a world where climate policy and technology accelerate, oil demand still endures but at a structurally lower level.
2. Equitable Growth Scenario (EGS)
This scenario imagines stronger growth in developing economies, with energy policies reflecting local priorities for industrialization and poverty reduction rather than uniform global decarbonization targets.
- Oil demand grows more robustly, reaching 130 mb/d by 2050.
- The trajectory is 6.5 mb/d higher than in the Reference Case.
- All fuels see higher demand, though oil and gas maintain their dominance.
The implication: energy poverty declines more rapidly, but emissions also rise, testing the balance between development and climate goals.
Regional Dynamics
Asia as the Center of Gravity
Asia-Pacific becomes the main demand hub. By 2050, more than half of Middle Eastern crude exports are expected to flow to Asia, reinforcing the region’s status as the world’s energy demand engine.
OECD Decline
OECD economies gradually reduce oil use through efficiency, electrification, and policy-driven decarbonization. Their share of global demand shrinks, even as per-capita consumption remains high.
Africa’s Rise
Africa’s role expands dramatically, not only as a demand center but also as a key source of supply. OPEC notes Africa will account for a major portion of new demand growth, driven by industrialization and rapid population increases.
Implications for Energy Markets
Investment Gap Risks
The $18.2 trillion investment figure underscores the scale of required capital. If upstream investment lags due to ESG pressures, regulatory hurdles, or capital discipline, supply shortages could emerge, driving price volatility.
Oil’s Long Tail
Even under the technology-driven scenario, oil remains indispensable in 2050. Petrochemicals, aviation, shipping, and heavy-duty transport show fewer viable substitutes at scale. This suggests hydrocarbons retain a “long tail” of demand, even in a decarbonizing world.
Policy Uncertainty
The divergence between the Technology-Driven and Equitable Growth scenarios illustrates how policy and technology drive outcomes. Investors face the challenge of planning for futures where oil either stabilizes at 107 mb/d or grows to 130 mb/d.
Energy Security vs. Climate Goals
The WOO highlights a growing tension: developed nations prioritize decarbonization, while developing nations emphasize affordability and development. This divergence could complicate global climate negotiations and influence investment flows.
Commentary: What the Outlook Means
For financial markets, OPEC’s 2050 outlook is both a warning and a reassurance. On one hand, the resilience of oil demand suggests that companies with strong upstream portfolios remain relevant and potentially profitable for decades. On the other, the range of scenarios reveals unprecedented uncertainty, requiring investors to hedge against both higher-for-longer and accelerated-transition outcomes.
For governments, the report underscores the risk of policy fragmentation. If OECD nations tighten carbon constraints while emerging markets expand fossil fuel use, the world faces uneven progress toward climate goals and possible trade frictions, such as carbon border adjustments.
For the energy industry, the clear message is: prepare for dual realities. Oil and gas must continue to supply rising demand in much of the world, even as companies invest in renewables, efficiency, and carbon capture. Those who can straddle both worlds will be best positioned.
Conclusion
The World Oil Outlook 2025 paints a picture of an energy future defined by contradictions and contingencies. Oil remains central in all scenarios, but the degree of its dominance depends on technology adoption, policy ambition, and the pace of equitable economic growth in the developing world.
Whether oil demand levels off at 107 mb/d in a technology-driven future or rises to 130 mb/d under equitable growth, OPEC’s message is clear: hydrocarbons will continue to play a pivotal role in the global energy mix through 2050.
For investors and policymakers alike, the takeaway is stark — the world must plan for multiple energy futures, balancing the urgency of climate action with the realities of development and energy security. For more details click here
