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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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How Accurate Are Peak Oil Demand Projections?


Jet fuel and petrochemicals are expected to fuel crude demand this decade, while oil demand in the transport sector is set to peak by 2026, one year earlier than originally anticipated. Goldman Sachs believes oil demand will peak in 2026, while BP Plc believes the highest global demand growth is already over, and International Energy Agency (IEA) thinks the peak could come later, in 2030. However it’s framed, it is clear that the oil and gas industry is facing a turbulent future.  

The adoption of electric vehicles (EV) is expected to increase sharply over the next decade, driving down demand for oil to power road transportation. According to Deloitte, we can expect a CAGR of 29 percent for the EV industry between now and 2030, with sales expected to increase from 2.5 million in 2020 to 11.2 million by 2025, and 31.1 million by 2030.

It is thought that China will account for around 49 percent of the global EV market share, with Europe following at 27 percent and the USA with a 14 percent market share. Developed countries are expected to drive EV demand over the next decade until growth levels out in the 2030s. 

In the latest Goldman Sachs report the bank explains, “Government policies driving higher efficiency gains and lower emissions have had the strongest bearing on road transport demand”. In addition, “Petrochemicals will become the new baseload for oil demand, driven by economic growth and rising consumption, especially in emerging markets.”

Related: Why Natural Gas Won’t Be Replaced Anytime Soon

Net-zero targets across Europe and the U.S. will drive the development of renewable energy alternatives and will encourage the uptake of electric vehicles due to an increase in taxation on traditional vehicles. 

However, we cannot discount oil altogether as demand for the vital energy source will continue well into the next two decades, albeit at lower levels. In addition, while developed countries are pushing to decrease their consumption of fossil fuels, many developing nations continue to rely on oil and gas as core energy sources. 

Increasing populations and higher income levels across developing countries, particularly in Asia, are likely to contribute significantly to oil demand within the next decade and beyond, according to the IEA. Imports of crude oil in the region are expected to increase to around 27 million bpd by 2026, requiring the Middle East to ramp up its production levels substantially. The region’s import dependence could rise to as much as 82 percent that same year.

In response to the stagnation of oil demand post-2026, global oil prices could be pushed down to as little as $40 a barrel by 2030 according to the latest estimates. Brent could continue decreasing, hitting a low of between $10-$18 a barrel by 2050 if this demand trend continues. 

Energy consultancy WoodMac's Ann-Louise Hittle explains, "If we move to keep global warming to the 2 degrees Celsius limit set by the (U.N.-backed) Paris Agreement, the energy matrix will change – and change profoundly". 

However, despite hopeful Paris Agreement objectives, few countries have made advances in line with these aims to date, suggesting this change in demand levels is somewhat optimistic. For example, emissions increased from 50 billion to 55 billion tonnes between 2015 and 2020, according to UN statistics. 

Ban Ki-moon stated during the Paris Agreement Conference in December, “We have lost a lot of time. Five years after the agreement in Paris was adopted with huge expectations and commitment by world leaders, we have not done enough.”. 


While the oil demand outlook for the next decade looks bleak when you look at the push by many governments to reduce carbon emissions and develop renewable alternatives, the failure to act on Paris Agreement promises over the last five years suggests these projections may be exaggerated. In addition, developing economies could also contribute substantially to these demand levels over the coming decades. 

By Felicity Bradstock for Oilprice.com

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  • Alan Dr on April 23 2021 said:
    What we see is that many projections of future oil demand are based on population growth as according the EIA in this article. We can ask the same about population growth as the title of this article: How accurate are future population growth projections?
    The EIA most likely based its numbers on projections by the UN but many other studies show different numbers based on other models (like we can see in a publication of The Lancet of July last year for example).
    The question really is then, where is that population growth in Asia that the EIA is referring to?
    Apart from growth in Pakistan, the Philippines and Indonesia, most countries are at replacement fertility level or far below and about to go into decline or in decline already. Japan, Thailand and China are expected to see its population decline by half at the end of the century.
    The population growth we can expect to continue in the coming decades is in Subsaharan Africa and some Middle Eastern countries, not exactly current key markets for oil.
  • Mamdouh Salameh on April 23 2021 said:
    They are very inaccurate. The reason is that peak oil demand projections by Goldman Sachs, BP and the International Energy Agency (IEA) are based either on flawed assumptions or unsubstantiated ones. They all ignore some pivotal facts influencing the demand for oil.

    The first is that there could neither be a post-oil era nor a peak oil demand either throughout the 21st century and probably far beyond. Oil as a versatile energy source for global transport is replaceable. Oil demand is projected to continue growing in absolute terms well into the future underpinned by (i) its uniqueness; (ii) rising world population expected to hit 9.9 billion by 2050; and (iii) growing global GDP projected to rise from $78 trillion currently to an estimated $262.65 trillion by 2050. The world will need a minimum of 1.1 trillion barrels of oil between now and 2050 based on an average global oil demand of 103 million barrels a day (mbd).

    The second fact is that even 300 million EVs on the roads by 2026 could very slightly decelerate growth in global oil demand but they will never arrest it. They could only reduce global demand by 5.3%.

    The third fact is that as long as the global economy is driven by oil and gas there can never ever be zero emissions by 2050 or even by 2100.

    The fourth fact is that global energy transition won’t succeed without major contributions from natural gas and nuclear energy. That is why oil and gas will remain king.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Not an Expert on April 24 2021 said:
    In response to Alan Dr's comment India can expect significant amounts of population growth through to at least the 2040s and South East Asia for roughly about the same period. There is also the question about whether or not the "Asia" mentioned factors in Central Asia and the Middle East. The Middle East is expected to enjoy population growth throughout most if not all of the 21st Century.

    Finally, in regards to oil demand figures I am curious about what the developed world will replace oil and gas with? It's all very well converting over to electric or solar panels but whether does the energy come from in their manufacture? You will only be oil and gas free if every stage of your production cycle is derived from sources outside of non-renewables and there is no indication at all whether or not that would be the case. I'm hoping that the advances in metamaterials and nano-materials will make for far superior forms of infrastructure e.g. roads which can survive for years if not decades without maintenance to reduce non-renewable reliance and emissions (but that in turn will reduce economic activity so expect plenty of opposition to that).

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