Petrochemicals will remain a key component of oil demand through to 2050, according to the latest forecast published by OPEC last week.
• Petchem demand set to rise by 4.7m barrels/day by 2050
• Increasing GDP and non-OECD populations drive increase
• Regulatory, environmental concerns pose challenges to growth
The World Oil Outlook forecasts that demand from the petrochemicals sector will significantly increase, by 4.7 million barrels a day, from 15.5 million barrels/day in 2024 to 20.2 million barrels/day in 2050.

The sector is set to account for 16% of total oil demand in 2050, from 14% in 2024, with 90% of that growth coming from the Middle East and China as new capacity comes on stream.

Petrochemicals demand for oil will predominantly be as a feedstock, as more competitively priced fuels such as natural gas remain viable alternatives.

While natural gas and biomass are expected to increase their shares as a source of feedstock, naphtha and liquefied petroleum gas (LPG) will remain more suitable products for many downstream materials.

Petrochemicals oil demand in the OECD will likely mirror tight oil production in the US, which produces LPG and ethane as feedstocks in that market.

“Accordingly, demand in this sector is expected to grow until around 2035 and then start a slow decline for the rest of the forecast period,” the report said. This would see offtake from OECD countries reach 7.7 million barrels/day by 2050, close to its level in 2024.

MACRO, DEMOGRAPHIC DRIVERS
Overall demand is driven by expected GDP growth, rising population and income levels, and expanding industries and technologies that these products use, including renewables, electric vehicles (EVs) and construction.

“It is assumed, however, that this growth potential will be partly constrained by regulations and actions linked to environmental concerns,” the report advised.
“These relate to commitments to reduce the sector’s carbon footprint, the push to increase recycling, restrictions on single-use plastics, implementing ‘Extended Producer Responsibility’ schemes, an increasing penetration of bioplastics and improved circularity of petrochemical products.”

Naphtha demand is expected to grow from 2.8 million barrels/day in 2024 to 3.1 million barrels/day in 2030 in OECD countries, and remain around this level for the entire forecast.

OECD ethane/LPG demand is expected to rise by more than 600,000 barrels/day in the medium term before softening, partly as a result of a decline in petrochemical demand but also on LPG substitution in other sectors.

The outlook expects aviation to be the only segment that will show growth over the entire forecast period, with even this experiencing some limitations, adding around 1 million barrels/day between 2024 and 2050.

China remains the dominant country for oil demand, peaking at 17.7 million boe (barrels of oil equivalent) a day in 2035, driven by petrochemical growth and heavy transportation, but subsiding to 17.1 million boe/day, in part due to increased EV use.

Oil consumption growth in India is expected to rise from 400,000 barrels/day in 2024 to 1 million barrels/day in 2050, with naphtha used as the primary feedstock.

Petrochemical demand from non-OECD countries will be particularly strong as a result of population growth and an increasing middle class. In response, oil consumption is expected to rise to 12.5 million barrels/day in 2050, from nearly 8 million barrels/day in 2024 – an incremental increase of 4.6 million barrels/day.

Demand for ethane/LPG from non-OECD countries will increase by more than 4 million barrels/day between 2024 and 2050, while naphtha will add another 2.4 million barrels/day to incremental demand during the same period.

The global population is predicted to rise by around 1.5 billion people, from 8.2 billion in 2024 to almost 9.7 billion by 2050, mainly in non-OECD countries.

MOBILITY TO REMAIN PIVOTAL
Transport is set to remain “the backbone of oil demand” to 2050, accounting for 57% of global consumption in 2024, and is expected to largely retain this share over the entire forecast period. This accounts for both road travel and the aviation industry.

Overall energy demand is predicted to grow by 23%, with demand for all fuels expected to rise apart from coal. Oil consumption is expected to reach 123 million barrels/day by 2050.

Oil will retain the most significant share of the energy mix, just below 30%, with oil and gas accounting for over half of demand between 2024 and 2050. The share of renewables is set to increase by 10 percentage points from 2024, to 13.5% in 2050.

Chemicals usage is in part attributed to growth in demand from both segments, as products will be used for renewables, for instance in manufacturing photovoltaic panels for solar energy.

The percentage of oil, gas, and coal in the energy mix was around 80% in 2024, “only a little less than when OPEC was founded in 1960, despite energy consumption increasing more than five-fold over that time”, the report noted.

Although the long-term forecast is for increased energy demand, the outlook cautioned that volatility around the global economy and energy markets could alter the landscape quickly.

In 2024 petrochemicals production, along with growth in the aviation sector, were cited as the drivers of oil demand, which rose by 1.3 million boe/day compared with 2023, supported by sustained growth in transport and residential sectors in developing countries.

This growth was primarily driven by the continued expansion of the petrochemicals and aviation sectors, as well as sustained growth in road transportation and residential sectors in developing countries.
Source: ICIS by Morgan Condon, https://www.icis.com/explore/resources/news/2025/07/10/11118125/petchems-to-remain-key-driver-of-increasing-oil-demand-to-2050-opec/