Oil demand: record 2023 but electric vehicles gnaw at growth

Data on the global oil market

(sustainabilityenvironment.com) – World oil demand is reaching record levels, supported by the strong recovery of summer air travel, increased employment in electricity production and the surge in Chinese petrochemical activity. But if this 2023 seems certain that it will close with a new boom, for 2024 the matter changes. The analysts of field in fact preview that the consumptions begin to slow down, accomplices the minor economic dynamism and the transition of the transport field. To the point of showing the possible peak of 49 mb/g in demand for automotive fuels already in 2027, according to BloombergNEF.

read also IEA forecasts: Oil demand, peak ‘in sight’ before 2030

For the BNEF experts, in fact, from that moment on, the consumption of gasoline and diesel of the transports on road will begin to decrease structurally, reaching the 35 million barrels a day within 2040. “A combination of electric vehicles, fuel efficiency and shared mobility is driving down demand for road fuels,” said David Doherty, head of oil and renewable fuel research at BNEF. “This decline will worsen after 2030″. According to BloombergNEF, oil consumption wiped out by electric vehicles alone will rise to over 20 mb/d by 2040.

Oil supply and demand 2023

According to the latest International Energy Agency (IEA) Oil Market Report, global oil demand is set to expand this year by 2.2 million barrels per day (mb/d) to 102.2 mb/d in 2023, with China accounting for over 70% of growth. But already in 2024 growth is expected to slow 1 mb/d.

At the same time, global oil supply plummeted by 910 kb/d to 100.9 mb/d in July. The sharp reduction in Saudi production last month was felt on the offer of the OPEC+ block that fell to 50.7 mb/d, equalling non-opec+ volumes increased to 50.2 mb/d. The IEA report estimates a new record from 101,5 mb/g in 2023 crude oil production worldwide, with the US driving growth in non-opec+ countries.

In this context, exports of Russian crude oil to China and India slowed growth, but accounted for 80% of Moscow’s shipments.