August 15, 2023
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 batteries are on the march, and BloombergNEF is now predicting peak demand for road fuel isn’t that far off, arriving in 2027.
Oil consumption displaced by EVs rises to over 20 million barrels per day by 2040, according to BNEF’s Economic Transition Scenario, which models a market-led energy transition that assumes no policy changes. That is more oil than the US consumed last year.
EVs are expected to significantly reduce global oil demand by 2030, potentially displacing over 5 million barrels of oil per day.
By the end of 2024, the global electric car fleet reached nearly 58 million, more than triple the number in 2021. These EVs now make up about 4% of the global passenger car fleet.
The trend is strongest in China, where roughly 1 in 10 cars is electric. In Europe, the ratio is 1 in 20, but growing fast.
Norway’s oil demand from the road fell 12% from 2021 to 2024.
IEA analysts highlighted that even if global oil prices fall to $40 per barrel, EVs remain cost-effective especially with home charging. This way drivers can continue saving money by switching to electric vehicles.
In China, fast public charging costs about twice as much as charging at home. Yet, EVs still offer better fuel savings than gas-powered cars.
OPEC
OPEC expects oil demand to grow by around 1.3 million barrels per day (mb/d) in both 2025 and 2026. Almost all this growth will come from non-OECD countries, where demand is expected to rise by 1.2 mb/d each year. In contrast, OECD countries will see only a small increase of 0.1 mb/d annually.
IC vehicles will hang around for quite a while. Oil Demand is growing outside OECD countries.
Any pronouncement of the death of major oil corporations is WAAAAAAY premature.
Interest in the Middle East will continue to be of interest to the US government.
I see business as usual in my lifetime. TJ is 74 years old.