OPEC says oil remains relevant as surge in car ownership to drive demand growth

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OPEC said Tuesday that the cartel expects a surge in car ownership in the developing world to far outweigh the adoption of electric vehicles over the coming two decades, The Punch reports.

In its annual look at long-term developments likely to affect the energy market, OPEC said it expects growth in the global economy to be centred in developing nations, which will, in turn, spark a boom in car ownership. The World Oil Outlook 2040 report estimates the size of the global economy to be 226 percent that of 2016, with developing countries accounting for three-quarters of the growth.

With their increasing income, people in developing nations are expected to splurge on cars, tripling their number on the road in the region to 1.2 billion. And while the OPEC report expects electric vehicles to make inroads in the market, it doesn’t expect them to drive out traditional internal combustion engines just yet. Overall, OPEC forecasts demand for oil to increase to 111.1 million barrels per day in 2040, up from 95.4 million in 2015.