IEA & OPEC Annual Outlook Reports: 2022-2023 Extracted Projections¶

This document synthesizes the key long-term oil demand, supply, and investment projections from four major annual outlooks, tracking how the structural view evolved between the 2022 and 2023 editions.

1. IEA World Energy Outlook 2022¶

Context¶

Published in the immediate aftermath of Russia's invasion of Ukraine and the resulting global energy crisis. The crisis was described as "the first truly global energy crisis."

Oil Demand Peak / Plateau¶

STEPS scenario: First-ever WEO scenario based on prevailing policies to project a definitive peak in global demand for all fossil fuels.
Oil demand levels off in the mid-2030s before ebbing slightly to mid-century.
Coal peaks within the next few years; natural gas reaches a plateau by end of decade.
APS scenario: All fossil fuel demand enters decline by 2030.
NZE scenario: CO2 emissions fall to 23 Gt by 2030, net zero by 2050.

Long-term Demand Level¶

STEPS: Fossil fuel share falls from ~80% to <75% by 2030 and just above 60% by 2050.
STEPS: CO2 emissions peak at ~37 Gt in 2025, fall to 32 Gt by 2050 (implies ~2.5 C warming by 2100).
APS: Emissions peak mid-2020s, fall to 12 Gt by 2050 (~1.7 C warming).

Investment Requirements¶

Clean energy investment: rises above USD 2 trillion by 2030 in STEPS (50% rise from 2022 levels).
NZE scenario requires above USD 4 trillion by 2030.
STEPS: Average ~USD 650 billion/year upstream oil and gas investment to 2030 (>50% increase vs. recent years).
For every USD 1 spent on fossil fuels globally, USD 1.5 spent on clean energy (2022 ratio).

Key Structural Assumptions¶

EV adoption: By 2030 in APS, every second car sold in EU, China, and US is electric. US EV sales 7x larger by 2030 (STEPS) thanks to IRA.
China: Coal and oil consumption both peak before end of this decade. Gas demand growth slows to 2% p.a. (2021-2030) vs. 12% p.a. average since 2010.
Heat pumps & efficiency: Cooling demand in EMDEs rises by 2,800 TWh to 2050 in STEPS; halved in APS with tighter standards.
Hydrogen: APS sees global low-emissions hydrogen production reach >30 Mt/year by 2030.
Russia: Oil production 2 mb/d lower than WEO-2021; gas down 200 bcm by 2025. Fossil fuel exports never return to 2021 levels in any scenario.

2. IEA World Energy Outlook 2023¶

Context¶

Published one year after the energy crisis; some immediate pressures eased but markets remain "fragile." Middle East instability adds further uncertainty. Temperature already ~1.2 C above pre-industrial.

Oil Demand Peak / Plateau¶

STEPS scenario: For the first time, demand for coal, oil, and natural gas all peak before 2030.
Oil demand peaks before 2030, but the post-peak decline is "a slow one" through to 2050.
Total fossil fuel demand declines from mid-2020s by ~3 EJ/year average to 2050.
Fossil fuel share drops from ~80% to 73% by 2030.
This is a significant acceleration vs. WEO-2022, where oil peaked in the mid-2030s.

Long-term Demand Level¶

STEPS: CO2 emissions peak mid-2020s; remain high enough for ~2.4 C warming by 2100 (improved from 2.5 C in WEO-2022).
Oil demand in advanced economies peaked in 2005; China's robust growth weakens and eventually declines.
Oil demand in EMDEs (ex-China) grows continuously to 2050.
Road transport no longer a source of oil demand growth by end of this decade.

Investment Requirements¶

Clean energy investment risen 40% since 2020.
End of fossil fuel growth era "undercuts the rationale for any increase in [oil & gas] spending."
Oil and gas investment today is almost double the level required in NZE Scenario for 2030.
EMDEs (ex-China) need energy transition investment to rise by more than 5x by 2030 to reach NZE levels.

Key Structural Assumptions¶

EV adoption: 1 in 5 cars sold globally in 2023 is electric (vs. 1 in 25 in 2020). US: 50% new registrations electric by 2030 in STEPS (vs. 12% projected in WEO-2021).
Solar PV: >500 GW added in 2023 (record). Manufacturing capacity could reach 1,200 GW/year by end of decade; only 500 GW deployed in STEPS 2030. Using 70% of capacity would match NZE Scenario.
China slowdown: GDP growth averages just under 4% p.a. to 2030. Total energy demand peaks mid-decade. If growth slows by another 1 pp: coal demand falls by ~Europe's total; oil imports -5%; LNG imports -20%.
LNG wave: ~250 bcm of new liquefaction capacity online by 2030 (~half of today's global LNG supply). US and Qatar account for 60%. Russia's share of internationally traded gas halved by 2030.
ICE peak: Sales of gasoline/diesel cars peaked 2017; two/three-wheelers 2018; trucks 2019.
Heat pumps: Outselling gas boilers in many European countries and the US.
Nuclear: Improved prospects -- lifetime extensions in Japan, Korea, US; new builds in several countries.

Year-over-Year Change (WEO-2022 to WEO-2023)¶

Dimension	WEO-2022	WEO-2023	Direction
Oil demand peak (STEPS)	Mid-2030s	Before 2030	Earlier by ~5-8 years
Fossil fuel share 2030	<75%	73%	Slightly lower
Implied warming (STEPS)	~2.5 C	~2.4 C	Improved
US EV share 2030 (STEPS)	Not explicitly stated (IRA noted as new)	50%	Dramatic increase
Solar PV record year	~230 GW	>500 GW (2023)	More than doubled
O&G investment rationale	Increase needed in STEPS	No longer the case	Shifted bearish

3. OPEC World Oil Outlook 2022¶

Context¶

OPEC's 16th edition. Emphasizes "all-fuels, all-technologies" approach. Explicitly pushes back against narratives favoring rapid fossil fuel phase-out. Notes chronic underinvestment in oil sector.

Oil Demand Peak / Plateau¶

Reference Case: Global oil demand does not peak within the forecast horizon (to 2045).
Demand rises from 96.9 mb/d (2021) to 109.8 mb/d (2045), a gain of 12.9 mb/d.
Growth slows after mid-2030s: virtually no increase after 2035, implying a "relatively long period of plateauing."
OECD demand declines by 10.7 mb/d; Non-OECD increases by 23.6 mb/d.

Long-term Demand Level¶

2030: 108.3 mb/d
2035: 109.5 mb/d
2040: 109.8 mb/d
2045: 109.8 mb/d (plateau)
Oil retains largest share in primary energy mix: 31% in 2021, dropping to ~29% by 2045.
Combined oil + gas share remains above 50% through 2045.
Fossil fuel share drops from ~80% to ~70% by 2045.

Investment Requirements¶

Total oil sector investment: $12.1 trillion cumulative to 2045.
Notes 5 mb/d annual capacity addition needed just to offset ~5% natural decline rate.

Key Structural Assumptions¶

EV fleet: Approaches 540 million vehicles by 2045, representing >22% of global fleet (total fleet 2.5 billion by 2045).
ICE dominance: ICEs expected to remain dominant technology for both passenger and commercial road transport.
Petrochemicals: Oil demand grows by 3.7 mb/d (2021-2045) -- a major demand pillar.
Aviation: Largest sectoral demand increase at 4.1 mb/d.
Non-OPEC supply: Peaks around end of current decade (US tight oil peaks ~16 mb/d around 2030), then declines from early 2030s.
OPEC share: Rises from ~33% to ~39% of global liquids supply by 2045.
Population: Global population to 9.5 billion by 2045.
GDP: 3% p.a. average global growth.

4. OPEC World Oil Outlook 2023¶

Context¶

Notes a "significant shift in the narrative" -- governments reevaluating sustainable energy pathways with pushback against rapid fossil fuel phase-out. Emphasizes energy security concerns and "all-peoples, all-fuels and all-technologies" approach.

Oil Demand Peak / Plateau¶

Reference Case: Global oil demand does not peak -- continues rising through 2045.
Demand rises from 99.6 mb/d (2022) to 116 mb/d (2045), a gain of 16.4 mb/d.
This is ~6 mb/d higher than the WOO-2022 projection for 2045.
Growth is more sustained: 112 mb/d by 2030, 114.4 by 2035, 115.4 by 2040, 116 by 2045.
OECD demand declines by 9.3 mb/d; Non-OECD increases by 25.7 mb/d.

Long-term Demand Level¶

2030: 112.0 mb/d
2035: 114.4 mb/d
2040: 115.4 mb/d
2045: 116.0 mb/d
Oil share in energy mix: 31.2% (2022) to 29.5% (2045) -- still the largest single fuel.
Combined oil + gas share: 54% in 2045.
Total primary energy demand grows 23% (291 to 359 mboe/d).
Other renewables (wind, solar) grow from 2.7% to 11.7% share.
Fossil fuel share drops from >80% to ~69% by 2045.

Investment Requirements¶

Total oil sector investment: $14 trillion cumulative to 2045 ($610 billion p.a. average).
Up from $12.1 trillion in WOO-2022 (+$1.9 trillion).
Upstream: $11.1 trillion ($480 billion p.a.).
Downstream: $1.7 trillion.
Midstream: $1.2 trillion.
"Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos."

Key Structural Assumptions¶

India: Fastest-growing major developing economy at 6.1% p.a. GDP growth. Adds 6.6 mb/d oil demand (largest single country increment).
China: Oil demand still grows by 4 mb/d (2022-2045) to 18.8 mb/d.
Petrochemicals: Demand grows by 4.3 mb/d (up from 3.7 mb/d in WOO-2022).
Aviation: +4.1 mb/d (unchanged from WOO-2022).
Road transport: +4.6 mb/d (up from 3.8 mb/d in WOO-2022).
Non-OPEC supply: US liquids supply peaks around end of current decade. Non-OPEC overall production declines from early 2030s to 69.9 mb/d by 2045.
OPEC share: Rises from 34% (2022) to 40% of global liquids supply by 2045. OPEC liquids reach 46.1 mb/d.
Technology: Emphasizes CCUS, direct air capture, clean hydrogen, circular carbon economy as emissions-reduction tools compatible with continued fossil fuel use.

Year-over-Year Change (WOO-2022 to WOO-2023)¶

Dimension	WOO-2022	WOO-2023	Direction
2045 oil demand	109.8 mb/d	116.0 mb/d	+6.2 mb/d (upward revision)
Growth trajectory	Plateau after ~2035	Continued growth through 2045	More bullish
Total oil investment	$12.1 trillion	$14 trillion	+$1.9 trillion
Petrochemical demand growth	+3.7 mb/d	+4.3 mb/d	Higher
Road transport demand growth	+3.8 mb/d	+4.6 mb/d	Higher
OPEC share of supply (2045)	~39%	40%	Slightly higher
Non-OECD demand growth	+23.6 mb/d	+25.7 mb/d	Higher
EV narrative	EVs grow but ICE remains dominant	Same framing, slightly higher road demand	Unchanged

5. Cross-Organizational Divergence: IEA vs. OPEC¶

The IEA and OPEC present fundamentally divergent structural views of the oil market's future:

IEA View (2023)¶

Oil demand peaks before 2030 (STEPS), driven by EV adoption, efficiency, solar deployment.
Post-peak decline is slow but definitive.
Investment in new oil and gas supply increasingly risky; rationale for spending increases is "undercut."
Fossil fuel era is "beginning of the end."

OPEC View (2023)¶

Oil demand grows continuously to 116 mb/d by 2045 -- no peak in sight.
$14 trillion in oil investment is required and should not be restricted.
EVs and renewables grow but are insufficient to displace oil from transport, petrochemicals, and aviation.
Non-OECD demand growth overwhelms OECD decline.

Key Divergence Drivers¶

EV penetration assumptions: IEA assumes much faster EV uptake (1 in 5 cars already electric in 2023); OPEC assumes ICE remains dominant.
Petrochemical demand: OPEC sees petrochemicals as a massive, growing demand pillar (+4.3 mb/d). IEA acknowledges growth but sees overall oil demand still peaking.
Non-OECD growth: Both agree on strong non-OECD growth, but OPEC's projections are significantly higher.
Policy implementation: IEA STEPS assumes existing policies deliver; OPEC Reference Case assumes enacted policies are "comprehensively implemented" but takes a more conservative view on transition speed.
Investment framing: IEA warns of overinvestment risk in fossil fuels; OPEC warns of underinvestment risk.

Implications for Investment Decision¶

The 6 mb/d gap in 2045 demand between OPEC (116 mb/d) and IEA (declining from pre-2030 peak) represents a fundamental uncertainty for crude oil industry chain investment.
If IEA is right: stranded asset risk rises for upstream investments with long payback periods.
If OPEC is right: underinvestment now creates severe supply shortfalls and price spikes in the 2030s-2040s.
The truth likely lies between, but the direction of year-over-year revisions is telling: IEA is revising demand peaks earlier; OPEC is revising demand levels higher. The two views are diverging, not converging.