End of cycle. World demand for oil will reach its maximum in 2028. From then on, the energy transition and the drive for renewables will mark a turning point in the market, according to the latest study by the International Energy Agency (IEA) entitled Oil 2023.
“Demand for oil from fossil fuels – which excludes biofuels, petrochemical feedstocks and other non-energy uses – is on track to peak at 81.6 mb/d in 2028, the last year of our forecast. Growth will reverse after 2023 for gasoline and after 2026 for transportation fuels in general.These trends are the result of a shift toward low-emission sources triggered by the global energy crisis, as well as political emphasis on improving energy efficiency. efficiency rapid growth in electric vehicle sales,” they explain in the report.
The aviation sector will experience a slightly different trend. It will expand strongly as air travel normalizes after the reopening of the borders. At the beginning of 2023, demand for was still below 2019 levels by more than 1 mb/d, or 13% less. It will quickly accelerate with a substantial increase of 2 mb/d in the next few years. The energy consumption of this sector will recover pre-pandemic levels only in 2027. However, here too, efficiency improvements and behavioral changes will slow down the growth rate.
“Post-pandemic changes in consumer behavior place an additional burden on transportation fuel consumption, as hybrid work and video conferencing have become entrenched in some business sectors in advanced economies,” the analysts explain. We are, therefore, facing a change in behavior and production model, in contrast to what has been experienced since the 20th century.
Among the different types of fuels, gasoline is the one that is destined to fall before the others. Its demand “will be disproportionately affected as electric vehicles progressively replace internal combustion engine vehicles. This means that this fuel is likely to see its earliest and steepest peak in demand. Its consumption will never return to normal levels.” 2019 and the post-pandemic peak could arrive as early as 2023. As for total transport demand, it will stabilize and peak in 2026, before declining.
