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Future Of Oil Demand Is Brighter Than You’ve Been Told

Oil demand’s future is rosier than the common narrative would have you believe, according to a report released today by Energy Outlook Advisors.

According to energy analyst and the report’s author Anas Alhajji, the hope that oil demand will decrease as the world transitions to clean energy is built on a lot of hype and wishful thinking.

China—the world’s largest investor in renewable energy—and India still use coal as the primary source of electricity generation. As these countries add green energy, it will have minimal effect on oil demand, if any at all, the report suggests.

Countries like China and India may have plans to continue adding solar, wind, and other clean energy sources, but economic growth continues to lap up the additions, meaning oil and even coal are unlikely to be displaced anytime soon. 

As seen in the report’s chart below, as global energy consumption increases—and even as solar, wind and other renewable energy sources increase their share of the total consumption—oil and gas demand continues to increase, with historical demand blips seen courtesy of high prices, not green energy policies.

According to the report, 82% of the energy consumed in 2022 came from fossil fuels, despite the trillions thrown at renewable energy since 2010. For China specifically, the report estimates that it would take China 211 years at the current rate of renewable spending to achieve carbon neutrality. India will take even longer, at more than 400 years.

In May, the IEA estimated that $2.8 trillion would be invested globally in energy this year, with more than $1.7 trillion of it headed clean energy’s way. Still, more than $1 trillion was thought to be spent on fossil fuels, including coal. At the time, the IEA estimated that clean energy investment would rise 24% between 2021 and 2023, compared to a 15% increase in fossil fuel investments. The IEA’s overall stance was that investments in clean energy is “significantly outpacing spending on fossil fuels”.

Nevertheless, economic and population growth continues to drag down the rate at which renewable energy is snapping up marketshare, and the data shows that little headway is being made. 

According to Energy Outlook Advisors, most countries will fail to reach their net-zero or carbon neutrality targets 2050.

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By Julianne Geiger for Oilprice.com

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  • O J on July 24 2023 said:
    I visited the Energy Outlook Advisors website. Its been a long time since I've viewed as basic 5 page website. I didn't think they were still available. Publications, blogs etc all empty. it's just a poorly executed disinformation campaign.
  • johnny W on July 16 2023 said:
    Surely this a bad thing tho? What will be the point in the profits if the world collapses?
  • Alan Dr on July 13 2023 said:
    It is the penetration rate of electric vehicles in the Chinese automotive market that reduces oil demand growth in China. The rest of the world is following this trend. This is independent from renewables as solar and wind.
  • Mamdouh Salameh on July 13 2023 said:
    Only environmental activists, the IEA and vested interests would deny that oil and gas will continue to drive the global economy throughout the 21st century and probably far beyond.

    This fact is staring them in the face. Yet they choose to bury their heads in the sand hoping it will disappear from the face of the earth.

    And this fact is that the global demand for oil and gas isn’t only brighter than they are being told but also it will continue growing well into the future albeit at a decelerating rate to satisfy the needs of a rising world population and a growing global economy.

    Oil and the global economy are inseparable. Destroy one you destroy the other.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • George Doolittle on July 13 2023 said:
    The USA has already transitioned to a natural gas driven energy economy making coal downright dirt cheap in the USA right now.

    Oil is only in so much demand upon the USA because the automotive product is now so much better and more reliable...with still growth prospects for pure BEV very strong tho and only getting stronger. Everyone is waiting upon Cybertruck to be specific.

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