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As petroleum companies continue to flood the global market. a new study by oil industry consultancy Wood Mackenzie predicts that the demand for oil will start to decline as early as 2036. when autonomous cars become more popular.
Wood Mackenzie`s new Macro Oils Long-Term Outlook includes their expectations of prices. supply. and demand as well as a series of themes that address the complexity of the oil market to 2040.
The U.K. energy consultancy`s expectations of peak oil demand coming sooner than expected are based on the increasingly important role electric and autonomous vehicles will play in the global transportation sector. The report suggests autonomous cars will greatly increase our reliance on electricity while decreasing our dependence on gasoline.
“Autonomous electric vehicles or robo-taxis will really change the face of transport in the coming decades.“ Ed Rawle. Wood Mackenzie’s head of crude oil research. told the Financial Times.
“Each autonomous electric vehicle (is) expected to have a larger impact on curbing oil demand than a conventional electric car. They will be on the road far more as they are autonomous. displacing a disproportionate amount of oil-based transport.“ Rawle added.
The report suggests that autonomous vehicles and Robo taxis will be commercialized by 2030. and in widespread use by 2035. Another factor in the decline in oil production will be increasingly stringent fuel-economy standards around the world. This alone is expected to take a big bite out of gasoline demand.
“They will be on the road far more as they are autonomous. displacing a disproportionate amount of oil-based transport.“ says Rawie.
Wood Mackenzie is also saying petrochemicals will grow stronger than gasoline demand. And many companies. like Saudi Aramco. are betting on petrochemicals to secure long-term demand for its crude oil.
Aramco is maintaining there will not be a peak in oil production. actually planning on increasing its refining capacity from five million bpd now to eight million bpd-10 million bpd. and to double its petrochemicals production by 2030.
Speaking at the aanual CeraWeek conference in Houston March 6. President and CEO Amin H. Nasser said that there is no “impending peak demand“. and that “global oil demand will continue to grow and that oil will maintain its preeminence in the global energy mix for the foreseeable future.“
This stance by Aramco goes along with the Macro Oils Long-Term Outlook H1 2018 report. which says: “As non-OPEC production growth slows and the importance of OPEC’s output increases from 2023. OPEC’s role in managing prices becomes more focused on ensuring upstream investment keeps up with replacing lost barrels from onstream declines. and the growth in oil demand over the next decade or so.`
The report concludes that the global oil and gas industry has significantly increased the pace at which new projects are brought to peak production levels. The projects are now being forecast to reach peak production in five years from the date of FID as compared to nine years earlier.
