By Sabrina Valle

HOUSTON (Reuters) – Exxon Mobil (NYSE:XOM) announced on Monday its expectation that crude demand will remain above 100 million barrels per day (bpd) through 2050, reflecting today’s levels and projecting a 25% increase compared to its European competitor BP (NYSE:BP).

This heightened demand forecast, articulated in Exxon’s latest global oil outlook, supports its ambitious production growth plans, marking it as the leader among Western oil majors. Notably, this forecast did not include a 2050 demand estimate in its previous outlook published in 2023.

In contrast, Exxon has a more cautious prediction on global carbon emissions reductions compared to BP. Exxon anticipates that technological advancements will facilitate emissions reductions post-2029, while BP suggests this will occur by the mid-decade.

Exxon plans to produce 4.3 million barrels of oil and gas per day this year—30% more than its U.S. rival Chevron (NYSE:CVX). Meanwhile, BP aims to reduce its production to approximately 2 million barrels per day by 2030.

Chris Birdsall, Exxon’s Director of Economics, Energy and Strategic Planning, stated, “Oil and gas demand have a very, very long runway and will continue to grow over the next few years.”

Exxon predicts that the rise of electric vehicles will not significantly impact long-term global oil demand. This outlook is supported by an expected increase in the global population from 8 billion today to nearly 10 billion by 2050, thereby boosting energy demands.

Even if every new vehicle sold worldwide in 2035 were electric, Exxon estimates that crude oil demand would remain at 85 million bpd, equivalent to the levels of 2010. In contrast, BP forecasts that oil consumption will peak in 2025 and decrease to 75 million bpd by 2050.

These estimates are significantly higher than the 24 million bpd of crude projected by the International Energy Agency (IEA) as necessary for the world to achieve net-zero emissions by 2050. Exxon anticipates that oil, natural gas, and coal will comprise 67% of the global energy mix in 2050, a slight decline from 68% last year.

The oil company emphasizes the need for substantial investments beyond current expectations to transition to unconventional resources. Its report highlights that wells found in these geological formations, like U.S. shale, have shorter production lifespans and a more pronounced natural decline.

According to Exxon, without an increase in investments, oil output could plummet by approximately 15% per year, a sharper decline than the IEA’s 2018 projections of about 8% annually.

This significant output drop could lead to oil prices soaring to five times their current levels, with global supply potentially declining to 30 million bpd by 2030, Birdsall noted.

“Global oil and natural gas supplies would virtually disappear without continued investments,” Birdsall emphasized. “The key driver behind this change is the shift towards more short-cycle unconventional assets.”