Stabilizing and balancing global oil markets stands at the forefront of OPEC's strategic priorities, and the organization's policies are not designed to steer or determine oil price trends, according to HE Haitham Al Ghais, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC).

Speaking in an exclusive interview with Qatar News Agency (QNA), His Excellency expressed strong confidence in the soundness of OPEC's decisions and said he expects future economic historians to hold the OPEC+ alliance in high regard for its pivotal and positive role in shielding the global economy from sharp fluctuations in energy supplies. The OPEC+ grouping, which pairs the 12-member OPEC cartel with major non-member producers such as Russia, has coordinated production levels since 2016, making its decisions a central reference point for global crude supply.

Strait of Hormuz and maritime security

Al Ghais revealed that member states have adopted alternative logistical solutions and routes, working with regional and international partners, to mitigate the impact of supply constraints arising from geopolitical tensions in the Strait of Hormuz and to keep energy flowing to global markets. The strait, which separates the Gulf from the Gulf of Oman, is one of the world's most critical oil chokepoints, with roughly a fifth of globally traded petroleum liquids passing through it, which is why disruptions there ripple quickly into tanker rates, insurance costs, and delivery schedules.

Recent developments concerning the security of maritime routes in the Middle East represent a temporary situation that has been addressed through proactive solutions, he said. Member states have shown remarkable resilience and a long-standing commitment as reliable suppliers, he added, noting that oil will remain vital to daily life and that diplomacy continues to be the best path to lasting solutions.

Investment needs and long-term demand

The Secretary General warned of the dangers of insufficient funding in the traditional energy sector, stating that meeting anticipated growth in global demand will require cumulative oil investments of $17.7 trillion by 2050. The caution reflects an ongoing industry debate: years of restrained upstream spending since the mid-2010s have raised concerns about future supply adequacy even as capital continues to shift toward low-carbon energy.

Long-term projections in OPEC's World Oil Outlook 2050 report, he said, indicate that global oil demand will rise to 124 million barrels per day by 2050, driven by a projected population increase of 1.4 billion, a doubling of the global economy, and continued urbanization. This outlook is notably more bullish than forecasts from some other institutions, such as the International Energy Agency, which has projected demand peaking before mid-century under current policy settings.

"Energy additions" instead of "energy transitions"

Al Ghais proposed redefining climate policy by replacing the term "energy transitions" with "energy additions." He pointed out that in 2025 the world recorded unprecedented simultaneous consumption of coal, oil, gas, and renewable energy.

Energy sources complement one another rather than compete, he emphasized, explaining that the manufacturing of wind turbines, solar panels, and electrical grid components relies entirely on oil derivatives and plastics. He also noted that 655 million people worldwide lack access to electricity and 2 billion people lack safe cooking fuel, which necessitates a comprehensive approach encompassing all energy sources, technologies, and populations.

Near-term outlook

On the near-term market outlook, His Excellency said market fundamentals remain strong and robust, with global economic growth projected at 3% in 2026, supported by momentum in the US economy and significant investments in artificial intelligence in Asian countries such as China and India.

Based on these indicators, the OPEC Secretary General anticipated global oil demand growth of 600,000 barrels per day in 2026, driven by the economies of Asia, Latin America, and Africa. This growth is expected to be matched by an anticipated expansion in non-OPEC+ oil liquids production of 600,000 barrels per day, reaching 54.8 million barrels per day, led by Brazil, the United States, Canada, and Argentina.

Source: Dar Al Sharq Press, via Hellenic Shipping News