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Why Russia Should Exit The OPEC+ Deal

Russia isn't nearly benefiting as…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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IEA’s Chief Says EVs Are Not Upending Oil Markets

Fatih Birol, the executive director of the International Energy Agency said he did not expect electric vehicles to lead to a peak in oil demand anytime soon. Speaking at the Energy for Tomorrow conference in France, Birol noted that most of oil demand growth that we are witnessing at the moment is coming from vehicles other than cars: aircraft and trucks, as well as from the petrochemical industry.

Birol is not alone in his skepticism of the disruptive potential of electric cars, with some observers noting that even EV champion Norway has seen its crude oil demand grow consistently through the years, despite its rapid adoption of electric cars.

Still, there are forecasts pointing to a disruption, such as Bloomberg’s new Energy Finance’s prediction that plug-in cars will eliminate as much as 13 million barrels of daily crude oil demand by 2040.

And it’s not just electric cars. Siemens and Scania earlier this year unveiled a truck that uses a pantograph feeding it power from wires running above it. Just like a trolley or an electric train.

Unlike trolleys and electric trains, however, these Scania trucks (two test ones for now) can detach from the wires to overtake another vehicle or switch lanes for any other reason, and then smoothly return to the electrified lane because they also have internal combustion engines (that run on biodiesel), as well as battery-powered electric motors. These two motors allow the truck to “hop” from one electrified portion of a highway to another. Related: Oil Continues To Crash After EIA Reports Biggest Inventory Build In 34 Years

Wood Mackenzie has also said in a report that Tesla’s Model 3 – the company’s much-hyped affordable EV – could shave off 300,000 bpd from U.S. gasoline demand by 2035. The lead author of the report pointed out that “The impact of Model 3 on the larger energy markets will not be in how many Model 3’s Tesla sells but what it has arguably done to spur wider electric-car production.”

Skepticism is in order when it comes to electric vehicles, just like any other breakthrough technology, at least in its early stages. The fact that there is a global drive for cleaner energy sources—not just as car fuel—should not be underestimated.

By Irina Slav for Oilprice.com

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