Opening remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 5^th Technical Meeting on Asian Energy and Oil Outlook, 18 November 2019, Vienna, Austria.

Distinguished guests, colleagues, ladies and gentlemen,

Good morning and welcome to the OPEC Secretariat for this Technical Meeting on Asian Energy and Oil Outlook. I want to welcome all of our delegates and experts from Asia who travelled from far and wide to be here today. We very much look forward to your valuable input and keen insights as we compare notes on future energy outlooks and seek to anticipate the challenges and uncertainties that may be on the horizon.

Inaugurated in 2015, this event, now in its fifth iteration, continues to be a valuable component of OPEC’s wider portfolio of producer-consumer dialogues. OPEC has ongoing dialogue initiatives with China, India, the Russian Federation, the European Union, the United States, the International Energy Forum and the International Energy Agency, and the most recent addition, the Gas Exporting Countries Forum.  These efforts are a key part of our strategy to promote oil market stability through open and transparent international energy cooperation. I believe, looking ahead, this approach will be more important than ever as we seek to navigate an increasingly complex and inter-dependent international energy market.

Delegates, ladies and gentlemen,

When speaking of the future of energy, the continent of Asia is of utmost importance. Asia is and will continue to be the leading center for oil and energy demand growth as it seeks to fuel its rapidly growing economy and support the requirements of a rapidly expanding population. This is confirmed by our 2019 World Oil Outlook, which was officially launched on 5 November.

Global oil demand is expected to increase by roughly 12 mb/d, rising from 98.7 mb/d in 2018 to 110.6 mb/d in 2040. The majority of this growth will come from Asia due rapid population growth, an expanding middle class and swift economic expansion. Non-OECD oil demand is expected to rise by 21.4 mb/d between 2018 and 2040. Of this, India and China will lead the way with an estimated demand growth of 5.4 mb/d and 4.4 mb/d, respectively. From 2018 to 2040, the economies of India and China combined are forecast to expand from 27% of the global economy to 40%.

In both the medium- and long-term, the Asia-Pacific region is also set to be a leader in the expansion of refining capacity. At the global level, 8 mb/d of new crude distillation capacity from all assessed projects is expected between 2019 and 2024, with over 70% in the Asia-Pacific and Middle East.

Needless to say, increased refinery capacity in Asia will certainly require greater quantities of crude. This is reflected in the forecast for trade flows, which sees Asia-Pacific imports expanding. Our latest estimates show crude exports from the Middle East to the Asia-Pacific region increasing by around 7 mb/d between 2025 and 2040, rising to approximately 23 mb/d. This will make the Asia-Pacific region the primary outlet for Middle Eastern crude.

At last week’s ADIPEC event, we had the opportunity to discuss these key messages with several of our Asian partners, including Indian Oil Minister, His Excellency, Dharmendra Pradhan, at OPEC’s dedicated session on the 2019 World Oil Outlook. These positive discussions are clearly the outcome of years of dialogue and cooperation OPEC has had with its Asian partners and other consuming countries around the world.

I would also point out that the International Energy Agency has just released its World Energy Outlook 2019 in which a similar forecast is published regarding the important role oil and gas will continue to play in the long term to meet the massive demand growth, predominantly coming from Asia.

Additionally, I would like to point out the immense success of the Declaration of Cooperation between 24 OPEC and non-OPEC producers in re-establishing balance to the global oil market. In July 2019, the Charter of Cooperation was endorsed, proving a longer-term institutional framework for this landmark cooperation. These key decisions are providing the groundwork for a sustainable stability as well as adequate and timely investment in the industry.

Finally, we must not forget the critical role of technology in addressing the challenges of meeting future energy demand while also increasing energy efficiency and addressing energy poverty, which, unfortunately continues to affect a significant part of the world population.

Looking at today’s agenda, in Session 1, we look forward to hearing a presentation on the main findings of our 2019 WOO. We will also benefit from presentations on the Asian perspectives on energy outlooks, trade negotiations and economic issues.

Another pressing issue for Asia that we will cover today in Session 2 entails the new IMO 2020 regulations on sulpur content in marine bunkers. We will look at this issue from a variety of perspectives to assess how these developments might affect the global and Asian markets.  

Finally, in Session 3, we will have the opportunity to hear presentations on energy and oil outlooks from specific countries, including China, India, South Korea and Japan.

Delegates, ladies and gentlemen,

What happens in Asia, affects the entire industry. In this regard, today’s meeting will cover some of the most pressing issues in the global energy market. The presentations and discussions on our agenda will undoubtedly spark lively discussions and produce new and innovative insights.

In conclusion, I would add that the complexity of today’s energy market underscores the importance of forums like the one today. Increasingly, such opportunities for like-minded stakeholders to gather and discuss pressing issues of mutual concern should be a top priority.

With that in mind, let us proceed with our agenda. I wish you all very fruitful deliberations today.

Thank you.