International Energy Agency: Automotive Demand for Oil Will Peak in 7 Years
The International Energy Agency (IEA) said that as the population grows and people become more affluent, the number of motor vehicles on the road is also growing rapidly, but the oil use of cars is expected to peak within seven years.
Since the first Ford Model T rolled off the production line in 1908, the car and oil have maintained a close relationship, and this relationship has changed the world drastically. But the IEA said that with the increasing popularity of electric vehicles and more fuel-efficient cars on the road, thereby offsetting the growth in the number of cars in emerging market countries, the oil consumption of cars will peak in the middle of the next decade.
The Paris-based energy agency said "energy efficiency measures and alternative fuels will continue to dampen oil demand beyond 2025," even in developing economies like China, where oil demand growth is slowing.
Global oil consumption is close to 0.1 billion bpd, with automotive demand accounting for 21.4 million bpd. By the end of the 2020 s, this figure will increase to 23 million barrels per day, and by 2040, the oil consumption of automobiles will fall back to the current level, even though the global number of automobiles is expected to increase by 80% compared with today.
The IEA added that between now and 2040, total oil consumption in the automotive, aircraft, marine, truck and petrochemical industries will continue to grow at half the rate of the past 20 years.
The IEA said that between 2000 and 2017, total oil consumption increased by 24% to 95 million barrels per day, and absolute oil demand will increase by only 12% to 0.106 billion barrels per day by 2040.
The forecasts are part of the IEA's annual long-term outlook report, which reflects the policy goals of governments around the world. Companies such as Tesla are leading the fight against the use of oil, with as many as 0.3 billion electric vehicles expected to be in use by 2040, reducing demand for oil by 3 million bpd.
But the bigger impact will come from further increases in fuel economy standards for conventional cars, which will reduce oil consumption by 9 million barrels per day. According to the International Energy Agency, "the improvement of global vehicle fuel efficiency is the biggest factor leading to the slowdown in automobile demand for oil."
By 2040, biofuels will reduce oil demand by 2.5 million barrels per day, while the use of natural gas as a fuel for automobiles will reduce oil demand by 1.6 million barrels per day.
The International Energy Agency predicts a sharp reduction in oil demand in developed economies, with the European Union's oil demand falling by 45% by 2040 and North American oil demand falling by 25%. (Source International Oil Network)