IEEJ： March ©IEEJ 2024
Special Bulletin
A Japanese Perspective on the International Energy Landscape (677)

February 22, 2024

At the 14th IEA-IEF-OPEC Symposium on Energy Outlooks
Ken Koyama, PhD
Chief Economist, Senior Managing Director
The Institute of Energy Economics, JapanOn February 21, the 14th IEA-IEF-OPEC Symposium on Energy Outlooks was held at theKing Abdullah Petroleum Studies and Research Center (KAPSARC), a think tank based in Riyadh.
This symposium has been held annually in the Saudi capital since the first one in 2011 to promotedialogue between oil-producing and -consuming countries. The latest symposium brought together
representatives of the three major international energy organizations – the International Energy Agency,
the International Energy Forum, and the Organization of the Petroleum Exporting Countries, as wellas government officials from major countries, energy industry officials, and experts, for vigorous
discussion on short-, medium-, and long-term global energy outlooks.
The original purpose of this symposium is for the IEF to mediate dialogue between the IEA,
which represents oil-consuming countries, and OPEC, which leads oil-producing countries to stabilize
the international energy market. Until the 13th symposium, the conference had been held at the IEF
headquarters. The latest one became the first such gathering held at KAPSARC. The venue waschanged to meet the rising number of participants amid the increasing importance of and growinginterest in the symposium. According to the organizers, the number of participants in the latest
symposium topped 150 on a registration basis, far exceeding some 100 for earlier ones.
I have participated in the past symposium many times and summarized the points of the 13thsymposium last year in my essay, “A Japanese Perspective on the International Energy Landscape(624).” I felt that the various changes in the international energy market during the past year have hadsignificant impacts on the latest symposium. The rising emphasis on energy security in the wake of
the Ukraine crisis, the destabilization of Middle Eastern and other geopolitical situations, the trend
towards enhancing greenhouse gas emission reduction targets for 2035 based on the 28th Conferenceof the Parties to the United Nations Framework Convention on Climate Change, and the widening gap
between the "ideal energy future" and reality represent a new situation surrounding the internationalenergy market. Against this backdrop, the future of the international energy market is becoming more
uncertain than ever, testing the role of energy outlooks. In this sense, the symposium was extremely
timely for promoting frank dialogue on energy outlooks. In the following, I would like to summarize
the points of the symposium that were impressive to me.
When the outlooks were compared, the undoubtedly key point was how to view the futureof fossil fuels. The IEA and OPEC outlooks provided far different scenarios for fossil fuels. There aresubstantial differences in global oil demand projections not only for the long term but also for the shortterm. The IEA projects global oil demand growth in 2024 at 1.2 million barrels per day, 1 million bpd
less than 2.2 million bpd as forecast by OPEC. The difference might depend on how to view Chinesedemand, the impact of electric vehicle penetration, and the normalization of the oil market amid therecovery from the COVID-19 pandemic. Furthermore, it seems that the wide difference between shortterm projections reflects a gap between medium to long-term outlooks.
1

IEEJ： March ©IEEJ 2024
OPEC's long-term outlook predicts that global oil demand will continue to increase in thecentral scenario, reaching 116 million bpd in 2045. It projects oil demand to increase steadily without
peaking, supported by growing demand in countries such as India amid global economic expansion.
The OPEC outlook comes up with a clear message that $14 trillion in oil sector investment will berequired to support this growing demand. On the other hand, the IEA in its medium-term (five-year)
outlook predicts that demand growth will decelerate rapidly from 2024. This seems to be consistent
with its long-term outlook’s Stated Policies Scenario (STEPS), which assumes the largest oil demand
among IEA scenarios and indicates oil demand’s peaking before 2030. The medium- to long-term
outlook may have exerted some impact on the short-term outlook.
Even if oil demand peaks before 2030 and then declines moderately as projected in the IEASTEPS scenario, investment in the oil sector will still be indispensable, given the depletion of oilfields
used for current production. However, it should not be overlooked that large differences in oil demand
forecasts can make it difficult to invest in the oil sector and lead to supply shortages or a supply anddemand crunch. This is exactly the same for natural gas and LNG. At the symposium, many
participants pointed out that outlooks’ uncertainties and their large differences could be impediments
to market stability.
As energy experts accounted for most of the statements made at the symposium, anoverwhelming view at the symposium was that demand for fossil fuels is unlikely to decline so easily
or rapidly, given reality. In such a situation, there is an urgent need to secure appropriate investment.
Their statements indicated that it is difficult and important to secure investment as capital disciplineor how to use capital efficiently is highlighted amid high interest rates and inflation after the end of
free money and ultralow interest rates under the super-easy monetary policy that had dominated theworld until recently. Furthermore, we cannot overlook that policy changes can become constraints onnecessary investment for the future, as symbolized by the recent U.S. pause on LNG export licenses.
I was impressed by the fact that symposium participants raised interesting questions fromvarious perspectives regarding medium- to long-term energy market issues. With regard to geopoliticalrisks, it was pointed out that we should pay attention not only to factors that impede the passage oftankers but also to the possibility of oil supply disruptions as the situation in the Middle East worsens.
It was also noted that the situation in Ukraine requires attention as attacks on energy-related facilities,
including Ukrainian attacks on Russian facilities, have been seen again amid the stalemate warsituation. It was also interesting to hear an argument that while there is a tendency to focus on thecrude oil market when it comes to oil issues, how to secure sufficient petroleum product supply
capacity may become an issue as the expansion of the world's oil refining capacity is rapidly slowing
down, with the capacity expansion shifting to petrochemical production.
It is important that issues regarding materials required for promoting the energy transition
were raised at the symposium. Participants were interested not only in the IEEJ Outlook's analysis on
the impact of automotive electrification on critical minerals, but also in the expansion andsustainability of demand for various other materials for energy transition, such as copper, iron,aluminum, and cement. Analyses and arguments regarding copper among them attracted particularattention. With regard to copper, which is closely related to electrification itself and plays anindispensable role in the process of energy transition, it was impressive for me to see symposium
participants noting that copper demand for a net-zero GHG emissions world is expected to far exceed
the maximum potential supply, that copper supply shortages and a race to more secure copper
resources may emerge because copper is an indispensable commodity for economic and industrial
2

IEEJ： March ©IEEJ 2024
activities in general, and that this situation should be recognized as an impediment to the developmentof developing countries, or the Global South. As uncertainties about the future of energy increasesignificantly and cause various issues, frank dialogue between stakeholders must be continued andenhanced as the first indispensable step to resolving those issues.

Contact: report@tky.ieej.or.jp
The back issues are available at the following URL.
http://eneken.ieej.or.jp/en/special_bulletin.html

3