When will oil demand peak? It depends on who you ask.
Fitch Solutions, for example, doesn’t see oil demand peaking within its forecast period, which runs to 2032, according to Emma Richards, an associate director of oil and gas at the company.
“Based on the way that growth is trending, it’s likely that demand will peak around the mid-2030s, although there’s a lot of uncertainty when forecasting that far out,” Richards told Rigzone.
“The picture is very different across developed and emerging markets. The former we forecast to fall into structural and deepening decline from 2025 onwards, but this is being comfortably offset by emerging market demand over the next decade,” Richards added.
“EM demand is more robust – the economic and demographic fundamentals point to a strong rise in overall energy demand growth and progress in displacing oil in the energy mix faces a number of headwinds in most markets. By the mid-2030s, though, it seems probable that EM growth will be sufficiently weak to pull consumption past its peak,” Richards went on to state.
Al Salazar, a senior vice president at Enverus Intelligence Research, told Rigzone that the company believes total global oil demand will peak and plateau “sometime in the back half of this decade due to 1/ bearish demographics, 2/ the electrification of the light duty vehicle fleet, and 3/ aggressive fuel economy standards”.
“However, on top of demand side factors, also contributing to peak demand is a lack sufficient global oil supply growth,” Salazar added.
IEA, BP Outlooks
In its latest World Energy Outlook report, which was released in October 2022, the International Energy Agency (IEA) highlighted that oil demand has different peaks under different scenarios.
Under an Announced Pledges Scenario (APS), net zero commitments lead to a peak in oil demand in 2024, according to the IEA, which outlined that under a Stated Policies Scenario (STEPS) scenario, global oil demand peaks and levels off after 2035.
In BP’s latest energy outlook, which was released at the end of January this year, the company noted that “global oil demand plateaus over the next 10 years or so before declining over the rest of the outlook, driven in part by the falling use of oil in road transport as vehicles become more efficient and are increasingly fueled by alternative energy sources”.
BP’s energy outlook outlined three scenarios – Accelerated, Net Zero and New Momentum – and looked at the energy system out to 2050.