Demand predictions accelerated due to COVID-19

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By: Noah Browning and David Evans – Reuters – The COVID-19 pandemic this year has dented oil consumption and brought forward forecasts by energy majors, producers, and analysts for when the world’s demand for oil may peak.

The rise of electric vehicles and a shift to renewable energy sources were already prompting downward revisions in forecasts for long-term oil demand.

While there is no consensus on when oil demand could peak, the revised predictions mark a boon to the fight against climate change and could weigh on oil companies’ plans to explore for and develop new resources.

BP – Could be as early as 2019

BP forecasts COVID-19 will knock around 3 million barrels per day (BPD) off by 2025 and 2 million BPD by 2050 in its central scenario.

In its two aggressive scenarios, COVID-19 accelerates the slow down in oil consumption, leading to it peaking last year. In the third scenario, oil demand peaks at around 2030.

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Equinor – 2027-2028

Norwegian oil and gas firm Equinor expects global oil demand to peak by around 2027-2028, two to three years earlier than the company previously forecast.

“Earlier assumptions for peak oil demand to happen around 2030 may be challenged,” the Norwegian oil major said in its annual energy outlook.

Equinor sees oil demand at 99.5 million barrels per day (BPD) in 2030, and falling to 84 million BPD in 2050, under its central scenario, dubbed Reform.


Bernstein Energy – 2025-30

Analysts at Bernstein Energy say IMF projections for GDP growth means global oil demand will again stand at 2019 levels of around 100 million BPD by 2023 before soon plateauing.

“Oil demand has not peaked, but it is likely not that far off either … we expect demand will not peak until sometime in 2025-30.”

Rystad Energy – 2028

Norway’s biggest independent energy consultancy Rystad Energy sees global oil demand peaking at 102 BPD in 2028, revised down from a previous prediction of just over 106 million BPD in 2030.

“The lockdowns will stunt economic recovery in the short term and in the long term and the pandemic will also leave behind a legacy of behavioral changes that will also affect oil use,” said senior oil markets analyst Artyom Tchen.

rystad long term forcast

IEA – within the next 10 years

The Paris-based International Energy Agency said peak oil demand is already a reality in advanced economies but is offset by a rise of 9 million BPD in developing economies between 2019-2030.

“The era of global oil demand growth will come to an end within the next 10 years, but in the absence of a large shift in government policies, I don’t see a clear sign of a peak,” IEA chief Fatih Birol told Reuters.

“A global economic rebound would soon bring oil demand back to pre-crisis levels,” he said in an interview.

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Goldman Sachs – after 2030

The rise in electric cars, renewable energy, and plastics recycling will sap oil demand but growth in developing countries will push a peak beyond 2030, Goldman Sachs said.

“We do not expect global oil demand to peak before 2030 in our base case driven by solid fundamental economic growth, emerging market demographics, and relatively low oil prices,” the bank said.

OPEC – Around 2040

In its first-ever prediction for global oil demand to peak, the Organization for the Petroleum Exporting Countries said demand would recover in the next two years but plateau by 2040.

“At the global level, oil demand is expected to increase by almost 10 million BPD over the long term, rising from 99.7 million BPD in 2019 to 109.3 million BPD in 2040 and to 109.1 million BPD in 2045,” it said in its World Oil Outlook.

That 2040 level stood at 1 million BPD below those the producer club predicted last year.

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Shell – no prediction

Royal Dutch Shell has held off on giving any prediction, but CEO Ben van Beurden told reporters this year that pandemic may have already brought about a peak in demand.

“Demand will take a long time to recover if it recovers at all,” van Beurden said.

“Energy demand, and certainty mobility demand, will be lower even when this crisis is more or less behind us. Will it mean that it will never recover? It is probably too early to say, but it will have a permanent knock for years,” he added.

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