Research company Rystad Energy has brought forward its prediction for peak oil demand by another two years, to 2026, when it will reach 101.6 million barrels per day – about 1% more than it was just before the pandemic. It had previously brought it forward by a similar period at the end of last year.
The new base-case scenario cites the increased push towards decarbonisation and the COVID-19 pandemic as driving the accelerated timescale. Greater sales of electric vehicles (EVs) will inevitably reduce the demand for crude oil, although these vehicles still require oil-based products like electric motor grease and transmission oil, such as those in the Mobil EV range. Other factors will also impact demand, such as greater use of alternative fuels in the maritime sector and the greater recycling of plastics.
According to Oil Price, Rystad Energy’s Oil Markets Analyst, Sofia Guidi Di Sante, said the COVID-19 pandemic will continue to impact oil demand through 2025, but the uptake of EVs will initially be slow. After this, she said that:
“From 2025-2035, structural declines and substitution impacts—especially in trucks—take hold, and then finally, towards 2050, the recycling of plastics and accelerated technologies in maritime will be the final transition leg bringing oil demand further down towards 51 million bpd in 2050 in our Mean Case.”
Road transport is likely to be the dominant factor driving the long-term drop in demand for crude oil, with EVs’ portion of the world’s vehicle sales set to rise from 23% in 2025 to 96% in 2050, according to Rystad.