When will oil demand peak? It depends on who you ask.
Fitch Solutions, for example, does not see oil demand peaking during its forecast period, which runs to 2032, according to Emma Richards, the company’s associate director of oil and gas.
“Based on how growth is trending, demand is likely to peak in the mid-2030s, although there is a lot of uncertainty when forecasting that far,” Richards told Rigzone.
“The picture is very different between developed and emerging markets. For the former, we expect to fall into a deep and structural downturn from 2025, but this is being comfortably offset by demand from emerging markets over the next decade.” Richards added.
“EM demand is more robust: economic and demographic fundamentals point to a strong pick-up in global energy demand growth and progress in shifting oil in the energy mix faces a number of headwinds most markets. By the mid-2030s, however, it seems likely that growth in emerging markets will be weak enough and DM losses high enough to push consumption past its peak,” Richards said.
Al Salazar, senior vice president at Enverus Intelligence Research, told Rigzone that the company believes total global oil demand will peak and extend “sometime in the back half of this decade due to 1 / bearish Chinese demographics, 2/ the electrification of the light. service vehicle fleet, and 3/ aggressive fuel economy standards.”
“However, in addition to demand factors, the lack of global oil supply growth is also contributing to peak demand,” Salazar added.
IEA, BP Outlook
In its latest World Energy Outlook report, which was published in October 2022, the International Energy Agency (IEA) highlighted that oil demand has different peaks in different scenarios.
Under an announced pledges scenario (APS), zero net commitments lead to a peak in oil demand in 2024, according to the IEA, which noted that under a stated policy scenario (STEPS), global oil demand it peaks and levels off after 2035.
In BP’s latest energy outlook, which was published at the end of January this year, the company noted that “global oil demand is volatile for the next 10 years or so before declining for the rest of the outlook, driven in part by the fall in oil use in road transport as vehicles become more efficient and are increasingly powered by alternative energy sources”.
BP’s energy outlook outlined three scenarios: accelerated, net zero and new momentum, and looked at the energy system up to 2050.
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