Can We Expect Oil Demand To Slow Anytime Soon?

The actual forecast on which competitive advantages are built is not the result of extrapolations from past experience. It is the result of early identification of the trends that will lead to a market, which often means understanding what consumers will like before they know it, and understanding how these trends will impact the market, before they actually do. . Predicting the demand for oil on this basis leads to some interesting – and some shocking – ideas.

Given that world oil demand comes from several segments of the world economy, each of which is influenced by different trends, current oil demand must first be divided into its main components before a trend forecast is developed.

According to data from the International Energy Agency (IEA), the main driver of oil demand is transport, or about 56% of total oil demand, or about 52 million barrels per day (mb / ) In 2015. Second part The industrial demand for industries such as iron, steel, cement production, construction and mining, which together represent 15% of the world’s oil demand, that is, 14 Mb / d Petrochemicals are third parties, accounting for 12 percent of world oil demand, 11 mb / d, while electricity production is the fourth with 6 percent, or 6 mb / d. Global demand, or 10 mb / d, comes from a range of different industries such as agriculture, bitumen and lubricants.

However, transport, the most important driver of oil demand, is by no means a homogeneous group, since it includes components for passenger vehicles (25 mb / d), commercial vehicles (17 mb / J), aviation ( 6 mb / d) and marine (5 mb / d). Some of the components of transportation are the most important drivers of oil demand than drivers other than transportation. Therefore, a forecast based on the trend of world oil demand requires a breakdown of current demand for oil, as shown in figure 1.

Under the pressure of tighter emissions regulations, the fuel economy of passenger cars has improved considerably in recent years. The average fuel economy in the US, for example, weighted sales of 20.8 mpg rose in 2008 to 25.1 mpg by 2017, an increase of 25% despite a trend Towards vehicles (SUVs) among consumers. And there is no reason to suppose that in the near future this trend will come to an abrupt end.
Related: Goldman Sachs warns peak of global oil demand

What is likely, however, is a gradual increase in the share of electric vehicles (EV) in the overall set of passenger vehicles, since basically the EV can meet the transport needs of consumers in a way (ICEV) – more storage and storage space for equal size, acceleration and deceleration faster, smoother, less maintenance, more reliable and environmentally friendly Among other things. Recent additions to the range of available EV models have already triggered this electrification revolution.

These cars, like Chevrolet’s Tesla bolt models, offer a range of behavior that goes beyond the needs of a typical ride, and that is essentially equal to the range offered by the ICEV. Under the impetus of improved battery technology, the cost of living of these EVs is also closer to that of the ICEVs.

Already, the cost of operating EV (fuel) and maintenance are much lower than those of ICEV. By the mid-2020s, battery technology should improve to the point that electric vehicles are cheaper to produce than ICEV in that electric vehicles exceed ICEV on a global cost basis and become the option Preferred In most parts of the world (it is interesting to note that the two countries that are expected to drive growth in the global vehicle market in China and India are also those that continue to electrify their fleet of vehicles more aggressively. )