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Tsvetana Paraskova

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World’s Top Commodity Trader Sees Peak Oil Demand Looming

The world’s largest independent commodity trader, Vitol, expects global oil demand to peak after 15 years, essentially putting the ‘peak oil demand’ date somewhere in the mid-2030s like other key players in the oil industry.

“We anticipate that oil demand will continue to grow for the next 15 years, even with a marked increase in the sales of electric vehicles, but that demand growth will begin to be impacted thereafter,” Vitol said in the outlook included in its 2018 trading volumes report.

Last month, BP said in its annual BP Energy Outlook that oil demand would rise during the first half of the outlook to 2040, but at a much slower pace than in the past, “before plateauing in the 2030s.”

Vitol admitted there has been a growing focus on the long-term outlook for oil demand within and outside the oil industry. The top independent trader also said it was “supportive of the need to move to more renewable sources of energy” and outlined recent investments in low-carbon joint ventures, including in the UK’s largest battery park portfolio. Vitol also plans to invest in renewable energy assets across Europe, with a focus on large-scale wind generation.

Despite recognizing the need of more green energy around the world, Vitol noted that “However, at present, we do not see how this can be achieved across all sectors in the near to mid-term, without halting economic development in large parts of the world.” Related: Trade Tensions Are Keeping A Lid On Oil Prices

While the ‘peak oil demand’ narrative has intensified over the past years, Vitol’s oil trading business generated a turnover of US$231 billion last year, thanks to higher volumes of traded crude oil and products—7.4 million barrels per day—and higher oil prices, the 2018 review showed.

To compare, in 2017, Vitol’s turnover was US$181 billion from the trading of 7 million bpd. Crude oil volumes, which continue to represent the largest part of Vitol’s business, rose to 3.8 million bpd in 2018 from 3.6 million bpd in 2017.

The privately held trader, which doesn’t disclose full results, was one of the bigger winners in the oil price volatility in the second half last year, tripling its second-half underlying profit compared to the first half, the Financial Times reported, citing people who have seen Vitol’s full 2018 earnings.

By Tsvetana Paraskova for Oilprice.com

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