© Reuters. A pump jack can be seen at sunrise near Bakersfield
(Reuters) – This year's COVID-19 pandemic has weighed on oil consumption, and it has come forward with predictions from energy companies, producers and analysts as to when global oil demand could peak.
The rise of electric vehicles and the shift to renewable energy sources have already resulted in a downward revision of forecasts for long-term oil demand.
While there is no consensus on when oil demand might peak, the revised projections are a boon to the fight against climate change and could weigh on oil companies' plans to find and develop new resources.
BP (NYSE 🙂 – Could be 2019
BP predicts that COVID-19 will mine around 3 million barrels per day (bpd) by 2025 and 2 million bpd per day in its core scenario by 2050.
In its two aggressive scenarios, COVID-19 is accelerating the slowdown in oil consumption and peaking last year. In the third scenario, oil demand will peak around 2030.
Graphic: BP Peak Oil: https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqogglvx/bpliquid.JPG
Equinor – 2027-2028
Norwegian oil and gas company Equinor expects global oil demand to peak between 2027 and 2028, two to three years earlier than previously forecast.
"Earlier assumptions for peak oil demand around 2030 could be called into question," said the Norwegian oil major in his annual energy forecast.
Equinor sees oil demand of 99.5 million barrels per day (bpd) in 2030 and a decline to 84 million bpd in 2050 in its key scenario known as reform.
Graphic: Equinor Peak Oil: https://fingfx.thomsonreuters.com/gfx/mkt/rlgpdaeeavo/Equinor%20outlook.png
Bernstein Energy – 2025-30
According to analysts at Bernstein Energy, the IMF's forecast for GDP growth means that global oil demand will be back to 2019 levels of around 100 million bpd by 2023, before reaching a plateau soon.
"Oil demand hasn't peaked, but it's probably not that far away either … we don't expect demand to peak sometime in 2025-30."
Rystad Energy – 2028
Norway's largest independent energy consultancy, Rystad Energy, sees global oil demand at 102 bpd in 2028, revised from an earlier forecast of just over 106 million bpd in 2030.
"The lockdowns will curb economic recovery in the short and long term, and the pandemic will also leave a legacy of behavioral changes that will also affect oil consumption," said Artyom Tchen, senior oil markets analyst.
Graphic: Rystad Peak Oil: https://fingfx.thomsonreuters.com/gfx/mkt/oakvexrlopr/rystadpeak.JPG
IEA – within the next 10 years
The Paris-based International Energy Agency said peak oil demand is already a reality in advanced economies but will be offset by a 9 million bpd increase in developing countries between 2019 and 2030.
"The era of global growth in oil demand will come to an end in the next 10 years, but since government policy is not changing much, I see no clear sign of a climax," IEA chief Fatih Birol told Reuters.
"A recovery in the global economy would soon bring oil demand back to pre-crisis levels," he said in an interview.
Graphic: IEA Peak Oil: https://fingfx.thomsonreuters.com/gfx/mkt/xklvyboolpg/IEAstated.JPG
Goldman Sachs (NYSE 🙂 – after 2030
The surge in electric cars, renewables, and plastic recycling will dampen oil demand, but growth in developing countries will peak after 2030, Goldman Sachs said.
"We do not expect global oil demand to peak before 2030 in our base case due to solid fundamental economic growth, emerging market demographics, and relatively low oil prices," the bank said.
OPEC – Around 2040
In its first forecast that global oil demand will peak, the organization for petroleum exporting countries said demand would recover over the next two years but would plateau by 2040.
"On a global level, oil demand is expected to grow nearly 10 million bpd over the long term, from 99.7 million bpd in 2019 to 109.3 million bpd in 2040 and to 109.1 million bpd in 2045 rises, "says World Oil Outlook.
That 2040 level was 1 million bpd below what the producers' club had projected last year.
Graphic: Opec Peak Oil: https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgzddwvq/Opecdemand.JPG
Shell (LON 🙂 – no forecast
Royal Dutch Shell has held back on forecasts, but CEO Ben van Beurden told reporters earlier this year that the pandemic may have already caused a peak in demand.
"It will take a long time for demand to recover, if it does at all," said van Beurden.
"The energy and security needs of mobility will be less, even if this crisis is more or less behind us. Does this mean it will never recover? It is probably too early to say, but there will be a lasting blow for years. " " he added.
