Will Global Oil Demand Peak This Decade

Joseph Lassiter and Lauren Cohen say the picture is likely to be more complicated about Global Oil Demand Peak , particularly as poor and fast-growing regions seek sources of energy to boost their economies.

Has the planet’s thirst for oil finally been quenched?

A leading international energy watcher said yes, last month he forecast that global transportation oil demand will peak around 2026, level off for all uses in 2028 and possibly peak by the end of the decade. According to Harvard experts, this forecast reflects what is happening in developed countries, where concerns about climate change have encouraged the electrification of vehicles, thereby increasing energy consumption. Reduction of renewable and fossil fuels.

However, they say the energy needs of less wealthy countries looking to expand their economies could dampen expectations in the coming years. Due to the introduction of electric vehicles (EVs), charging will peak in 2026. Introduction, growth of biofuels and improvement of fuel efficiency. He forecasts that demand growth across all sectors will slow to just 0.4 million bpd in 2028 from 2.4 million bpd this year, with the potential to peak globally in 2020-2030.

Henry Lee, Jassim M.Jaidah, director of the Harvard Kennedy School’s Natural and Environmental Resources program and professor of public policy, said that while there are many variables at play, he wouldn’t be surprised if transportation oil consumption peaked in 2026 . Even if that changes, while he’s overly optimistic, it’s likely to be achieved early in the next decade, he said. Lee said he’s surprised at how quickly some parts of the world are switching to electric vehicles.

In China, the world’s largest auto market, EV sales grew 26% in the first five months of 2023. He said sales of BYD Auto, China’s largest electric vehicle maker, rose 92 percent this year.


Likewise, US companies have invested resources in the development and production of electric vehicles. Lee said Ford and GM plan to launch new models in 2025, 2026 and 2027, while Volkswagen expects the majority of its fleet with new vehicles planned for 2026 and 2027.

It will soon be powered by electricity. “Ford and GM have invested billions of dollars in electric vehicle development, subject to California regulations,” Lee said. “There’s a huge investment going on and it’s too late to change that. Last August, officials in Sacramento said that by 2035, all new passenger cars and light trucks sold in the state, the nation’s largest auto market, will be electric or don’t have to be electric emissions.

But that momentum doesn’t mean all the pieces are ready or guarantee a smooth transition, Lee says, significant obstacles remain in connection with electricity prices and the development of charging infrastructure. Lee said vehicle charging costs are artificially low, which is a good thing for now since EVs represent only a small portion of the market. But the situation needs to be corrected as more and more electric cars hit the streets and the solution remains unclear.

In addition, significant investment is still needed to ensure sufficient charging stations, transmission lines, smart transformers and energy storage, Lee said. Some of the necessary funding was authorized in the Cut Inflation Act of 2022, but Lee said seven to eight times private investment is still required.

Automakers recognized this when in June Ford and GM announced an agreement to use Tesla’s charging technology platform, meaning their cars will use Tesla’s national grid. The experts Developed nations are using regulation and market forces to phase out fossil fuels, but the wild card in the IEA forecast relates to the developing world. Globally, gasoline is not widely used to generate electricity. However, this is less true in some developing countries, where gasoline and diesel generators supplement small grids or are unreliable, and where liquefied petroleum gas (LPG) is used for cooking, transport and even heating. .

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