The Organization of the Petroleum Exporting Countries (OPEC), is an intergovernmental organization founded by Saudi Arabia, Kuwait, Iraq, Iran, and Venezuela. OPEC is considered to possess majority control of the world’s crude oil production and the most considerable influence on oil pricing. OPEC also sets production targets for each member country in an attempt to control oil prices.
For decades, Saudi Arabia has been at the center of the global oil market, both as part of OPEC and as an individual country. Others have argued that Saudi Arabia has played the role of a swing producer, changing its quantity of oil production to stabilize the price in response to market changes. Regardless, Saudi Arabia has been a significant presence in the world oil market for over 40 years.
The World Oil Outlook (WOO) is put together annually by OPEC, WOO covers everything about the current oil industry, from recent events and production problems to future projections and the way ahead. It is common knowledge that the world is heavily reliant on oil for energy, transportation, and other needs. The WOO’s projections for the next couple of years show a steady increase in the world’s demand for oil, with a zero chance of our dependency on oil decreasing anytime soon.
So for what reasons will there be such a dramatic demand for an increase in oil production, you wonder? The increasing oil demand is profoundly affected by the growing global economy. An estimated 60 percent of the overall increase in demand for oil will come from middle distillates. The global transportation sector is expected to keep dramatically increasing from now until 2040. The need for diesel and jet kerosene to fuel aircraft, bus, truck, and marine fleets will be the leading cause of increased demand. The world has nearly double the number of automobiles it had a decade ago, and an ever-increasing world population that demands multiple means of transportation and energy.
With OPEC having the majority share of oil production and distribution, it also has an unrivaled insider’s perspective on how the oil industry expects and projects global supply and demand in the future years. The projected energy demand shows an astounding increase of 28 percent from 2010 to 2040. Although nuclear power, natural gas, and coal all play a significant role in the global energy industry, oil will remain the energy source with the largest share.
Despite OPEC’s expected untouchable oil production increase of 25 percent by the year 2040, the United States and Canada are two of the standouts expected to step up their oil production and exportation to help with the enormous increase in demand. Even with the U.S. and Canada increasing production, the Middle East will remain the world leader in international crude oil trade for the foreseeable future.
With such a substantial projected increase in our nation’s largest non-renewable resource, what is the plan for long-term sustainability? That is a question that remains unanswered; all that is known is that the industry leaders are trying to come up with a plan this very day.
Meanwhile, the oil industry grows every day, and a severe shortfall of skilled experts and manpower throughout the industry continues to exist. This poses a potentially enormous problem for the industry as the need for new refineries continues to increase. OPEC and other significant contributors are expected to lead the way into building the much-needed infrastructure for the future. With OPEC in control of the price of oil and the majority of oil production, OPEC members will remain the leaders in the industry, something which has always been a point of contention among nations.