EVs could cause oil demand to plateau
10 November, 2017
Global demand for OPEC’s crude will rise in the next two years more slowly than expected, the group forecast, as a recovery in prices resulting from an OPEC-led supply cut stimulates renewed output growth from non-members. The Organisation of the Petroleum Exporting Countries also said in its 2017 World Oil Outlook that rapid adoption of electric vehicles could cause oil demand to plateau in the second half of the 2030s, denting OPEC’s longer-term prospects.
OPEC increased its medium-term world oil demand forecast, expecting oil use to reach 102.3m bpd by 2022 - 2.24m bpd more than in last year’s report. Demand is seen at 111.1m bpd in 2040, up from 109.4m bpd expected last year, with OPEC’s share of the world oil market expected to rise to 46% from 40% in 2016.
“In just a few years, EVs have gone from being completely unaffordable, impractical and not particularly nice, to representing a valid option for a niche pool of customers,” OPEC said.
The 2040 oil demand forecast could be curbed to 108.6m bpd if electric vehicles are adopted more widely than assumed in the report’s reference case.