OPEC asks for investment in upstream sector, warns of $14.9tn requirement
Organisation of the Petroleum Exporting Countries
OPEC asks for investment in upstream sector, warns of $14.9tn requirement
The Organisation of the Petroleum Exporting Countries has called for urgent and sustained investment in the global upstream oil sector, warning that a cumulative $14.9tn will be required between 2025 and 2050 to meet projected demand and prevent a future energy crisis.
This investment figure, equivalent to $574bn annually, represents the bulk of the $18.2 trillion in total oil-related investments needed over the 25-year period.
OPEC had projected that $18.2tn investment would be required to meet global oil demand between 2025 and 2050, as it dismissed the notion of a looming peak in fossil fuel consumption as a “fantasy.”
This was revealed in the group’s newly released 2025 World Oil Outlook, which anticipates oil demand rising from 103.7 million barrels per day in 2024 to 116.5 mb/d by 2045 and peaking at around 123 mb/d by 2050, an 18.6 per cent increase over 26 years.
It also noted the need for continued investments in various segments of the sector to meet this demand.
Of the total investment requirement, upstream operations, including exploration and production, are expected to gulp the lion’s share at $14.9tn, or $574bn per year, as producers scramble to ramp up supply. Midstream and downstream investments will require $1.3tn and $2tn, respectively.
The report read, “Cumulative oil-related investment requirements to meet projected demand are assessed at $18.2tn over the period between 2025 and 2050.
“This is marginally higher than projected in the WOO 2024, as despite the outlook period being one year shorter, this Outlook has also seen long-term oil demand revised upwards, and liquids supply has followed.
“Total upstream investment requirements make up the bulk of the needed capital expenditure, now projected at $14.9tn, or $574bn per annum. Downstream and midstream investment requirements are projected at $2tn and $1.3tn, respectively.”
OPEC Secretary-General, Haitham Al Ghais, said continued investments are essential to guarantee future energy security and affordability, especially in the Global South.
“There is no peak oil demand on the horizon,” Al Ghais declared in the report’s foreword. “Efforts to rapidly phase out fossil fuels are unrealistic and disregard energy security, affordability, and socio-economic realities of billions still lacking basic energy access.”
The report underscores major drivers of rising oil demand, including population growth, urbanization, and the emergence of energy-intensive industries like artificial intelligence and cloud computing.
Global urbanisation is forecast to grow from 57 per cent in 2024 to 68 per cent by 2050, with developing regions, particularly Africa and Asia, expected to account for most of this shift. China’s urbanization is set to hit 80 per cent, while India is projected to reach 53 per cent, up from below 37 per cent in 2024.
“Urbanisation improves energy access and drives industrial growth, especially in economies still battling energy poverty,” the report stated.
Currently, North America (primarily the US and Canada) accounts for the largest share of upstream investment needs, nearly $250bn per year, owing to high development costs and a dominant share in global liquids production.
But over time, the report says the baton will shift to OPEC and its allies in the Declaration of Cooperation. The DoC’s share of global upstream spending will grow from 25 per cent in 2025 to 40 per cent by 2050, with annual investments rising from $120bn to nearly $240bn.
Other non-OPEC producers (excluding the U.S. and Canada) will see their spending grow from $90bn to just under $150bn per year during the same period.
The projections sharply contrast with those of the International Energy Agency, which insists that global oil demand will peak before 2030 as clean energy technologies become more widespread.
But Al Ghais criticized such outlooks, calling them politically motivated and disconnected from the energy realities of the developing world.
“Many of the net-zero emission timelines have little regard for the feasibility or impact on developing economies. It has become increasingly clear that the idea of swiftly phasing out oil and gas is not only unworkable, it is a fantasy,” he said.
As global investment tilts toward oil-rich regions, Nigeria is positioning itself as a key player in the future energy mix.
With over 37 billion barrels of crude oil reserves and 209 trillion cubic feet of natural gas, the country is banking on long-term demand projections to attract fresh investment into its oil and gas industry to support industrialisation.
