Global oil demand is set to reach a new record high this year, with over 102 million barrels consumed every single day, almost half of it by vehicles, according to Bloomberg NEF (BNEF).
In a report on Tuesday (Aug 15), BNEF said that so far, the growing fleet of electric cars, vans, trucks and buses has displaced just a sliver of demand — 1.5 million barrels of oil per day in 2022.
But it said batteries are on the march, and BNEF is now predicting peak demand for road fuel is not that far off, arriving in 2027.
BNEF head of oil and renewable fuels research David Doherty said a combination of EVs, fuel efficiency and shared mobility is knocking down demand for road fuels.
“This decline gets exacerbated post-2030.”
BNEF in its Economic Transition Scenario said oil consumption displaced by EVs will rise to over 20 million barrels per day (bpd) by 2040.
That is more oil than the US consumed last year.
Demand for road fuels will peak at 49 million bpd in 2027, it said.
From then on, demand begins to decline structurally, reaching 35 million bpd by 2040, BNEF said in its most recent outlook.
The firm said demand for gasoline and diesel for road transport has likely already risen as far as it’s going to go in the US and Europe, while demand in China is set to peak in 2024.
It said demand in other major consuming countries like India starts to decline later — in the 2030s.
Market interventions could materially alter the speed of this transition.
A higher oil price, for instance, makes EVs that much more competitive compared to a conventional combustion vehicle, and prices have just hit their highest level for the year.
The concerted push by the Organization of the Petroleum Exporting Countries to elevate the price of oil is yielding consequences it might not enjoy.
Meanwhile, BNEF said oil and gas companies are getting ready for a world which will require lower volumes of their product.
BNEF’s scoring of oil majors based on their preparedness for a world aspiring to net-zero emissions shows that the Europeans are in the lead, with Norway’s Equinor ranked highest in 2023, followed by BP.
