Global oil demand, struggling to recover from the coronavirus pandemic, could peak during this decade as electric vehicles become more widespread, according to a new report.
Demand for crude worldwide plunged by 16 million barrels per day during the second quarter, the largest drop in a single quarter, according to a Bank of America Securities report released this month. Although demand is recovering as countries lift travel restrictions, Bank of America analysts forecast oil demand could take three years to recover from the pandemic before peaking in 2030.
“Oil demand grows on our estimates to 2030, a point at which we see oil demand peak and go into terminal decline,” said Francisco Blanch, a commodity and derivative strategist with Bank of America Securities. “The peak is caused by the erosion of demand growth from substitution into electric vehicles.”
Bank of America expects electric vehicles will make up a third of sales of lighter vehicles by 2030, and 95 percent of sales by 2050. That means oil demand could peak at around 105 million barrels per day by 2030 and decline to 95 million barrels per day by 2050. If trucks also become electrified during this decade, global oil demand could fall to 76 million barrels per day by 2050, the bank said.
The Bank of America report comes as oil demand is slowly recovering from the coronavirus pandemic, which gave the oil and gas industry a glimpse into a possible future with fewer fossil fuels.
Read more: Houston Chronicle