Cartel says oil to stay top source of energy

FRANKFURT, Germany — While acknowledging the inevitable advance of alternative energy sources and technology, OPEC said that oil would be the leading energy source for decades to come as crude prices reached three-year highs Tuesday.

In its annual World Oil Outlook, OPEC acknowledged that more electric vehicles on the road and the push for alternative and renewable energy will indeed usher in an era of declining demand for oil in rich countries.

But the energy needs of expanding economies in other parts of world means that oil will be the world’s No. 1 source of energy through 2045, OPEC said Tuesday.

The long-term report from OPEC arrives as economies emerge from the most severe economic shocks from the global pandemic, snarling supply lines and creating tight supplies of nearly everything, including oil. Brent crude touched $80 per barrel on Tuesday while the U.S. oil benchmark crude wasn’t far behind, both reaching three-year highs. Hurricane Ida slammed into a critical port that serves as the primary support hub for the Gulf of Mexico’s deep-water offshore oil and gas industry in the U.S., worsening the supply situation, at least temporarily.

The average price for gasoline in the U.S. rose again over the weekend, according to the Lundberg Survey, and now costs $1 more per gallon than it did last year at this time.

After being stung by deep production cuts in 2020 during the depths of the pandemic, OPEC has increased production slowly.

“What is clear in this year’s [World Oil Outlook] is that energy and oil demand have picked up significantly in 2021, after the massive drop in 2020, and continued expansion is forecast for the longer-term,” OPEC said. “Global primary energy demand is expected to increase by 28% in the period between 2020 and 2045, with all energies required, driven by an expected doubling in size of the global economy and the addition of around 1.7 billion people worldwide by 2045.”

Only coal will see less use, while other sources of energy will see increasing demand, though the share will shift to include a bigger proportion for renewables, nuclear and natural gas, according to the group.