The world's demand for its oil will remain tempered over the coming five years, with no shrinking of its daily production expected.
OPEC confident of current oil resources
The world's need for OPEC's crude oil will remain tempered over the next five years, the group says in its annual forecast.
As a result, OPEC's unused oil output capacity is unlikely to shrink from the current level of 6 million to 7 million barrels per day (bpd).
For energy consumers, the group's main predictions in the report released yesterday should be reassuring: "Current investments should be enough to satisfy both demand for OPEC crude and provide a comfortable cushion of spare capacity, which already exceeds the very high level of 6 million bpd," OPEC said. "There are clearly enough resources to meet future demand."
Reserve estimates are rising as improved technology offers new ways of unlocking conventional and unconventional resources, the report said.
But for some OPEC countries with high state revenue requirements, the medium and long-term projections supplied by the group's secretariat might be unsettling.
The sustained spare output capacity equal to more than 7 per cent of global oil demand expected for the next five years would normally place downwards pressure on crude prices, although it might also help to stabilise the market, preventing a recurrence of the unprecedented 2008 price spike and subsequent crash that disrupted energy investment in most countries.
Although OPEC expects global oil demand to increase by 20 million bpd by 2030, or an average rate of 0.9 per cent a year, to 105.5 million bpd from 85.5 million bpd projected for this year, rising oil output from outside the organisation is predicted to account for more than half the increase.
OPEC's share of the world oil market could even fall slightly from its current level of about 34 per cent over the next five years before rising modestly to 36 per cent by the end of the forecast period.
One startling projection is that due to the rising contribution of biofuels and liquids produced from gas and coal in the oil mix crude's share could fall below 80 per cent within the next 20 years from above 90 per cent in 2005.
The implications of that include a sharp curtailment of opportunities for global refining capacity to expand in coming years.
Green energy policies are the source of even greater uncertainty for OPEC in the longer-term, the group said.
Efforts to reduce greenhouse gas emissions by boosting vehicle efficiency and adopting electric cars could have significant impacts on world oil demand.
The most ambitious estimates, such as a study by the James Baker III Institute for Public Policy at Rice University in Texas, suggest strong government policies to push electric cars could shave oil demand in the US and other industrialised countries by more than a third over 10 years, putting downward pressure on oil prices.
OPEC yesterday was more cautious, noting that "the internal combustion engine is expected to maintain its current position as the dominant automotive technology", and that change to vehicle fleets was likely to be more "evolutionary" than revolutionary.
Nonetheless, strong vehicle efficiency improvements and larger market penetration of hybrid-electric cars could reduce world oil demand by 5 million bpd by 2030 in some scenarios, the group said.
OPEC noted that uncertainty about energy policy was the biggest source of variation in the long-term oil demand forecast.
"Carbon-related legislation is still at a formative stage but the implication is that it could do as much to reshape global oil markets and re¿ning over the next 20 years, as will regional economic and population growth," it said.