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The accelerating adoption of electric vehicles (EVs) and electrification in other oil-consuming sectors is set to bring peak oil demand as early as 2026 at 101.6 million barrels per day (bpd), which would be just around 1 million bpd above the 2019 levels, according to Rystad Energy’s latest forecast.
At the end of last year, Rystad Energy had predicted that global oil demand would peak at 102 million bpd in 2028, noting back then that the push to low-carbon energy and the pandemic would speed up the peak oil demand timeline to 2028 from 2030 previously expected.
In its updated base-case scenario issued on Wednesday, the energy research firm is now further cutting to 2026 the expected timeline in which global oil demand would continue to grow.
EVs will be the key driver of oil demand being replaced, but in coming decades, oil could be substituted or recycled across other industries, including electrification of truck fleets, recycling of plastics, and accelerated technologies in alternative maritime fuels, according to Rystad Energy.
“Through 2025, oil demand is still affected by Covid-19 impacts and EVs are still slow to take off, then 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,” said Sofia Guidi Di Sante, oil markets analyst at Rystad Energy.
Road transport, which accounts for 48 percent of global oil demand, will be the ultimate driver, with EVs expected to account for 23 percent of global passenger car sales by 2025, up from 6 percent now, and then accelerate towards 96 percent penetration by 2050, the research company said.
Despite its bullish stance on the short-term future of global oil demand, Goldman Sachs also expects an “anemic” demand for oil from the transport sector after 2025, with transportation fuel demand peaking in 2026.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.