April 20, 2024
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OIL & GAS

Global Road Oil Demand to Peak by 2032 – Goldman Sachs

Goldman Sachs predicts that global road oil demand will reach a peak of 50 million barrels per day by 2032, representing a 5% increase, before gradually declining along a plateau.

The investment bank attributes this trend to the anticipated surge in electric vehicle (EV) adoption, with EVs expected to account for over half of auto sales by 2040. As a result, oil consumption per vehicle is projected to sharply decrease.

According to Goldman Sachs, the global fleet of vehicles, which currently stands at 1.7 billion, drove 47% of oil demand in 2023, with gasoline consumption accounting for approximately half of road demand.

The rise of new electric vehicles (NEVs), including battery-powered vehicles and plug-in hybrids, is already impacting oil demand, and the bank anticipates this trend to intensify.

The bank forecasts a significant reduction of 65% in oil use per vehicle by 2040, bringing it down to 285 gallons per vehicle annually, driven by the increasing prevalence of NEVs and improvements in internal combustion engine efficiency.

Despite this decline in oil consumption per vehicle, Goldman expects the global vehicle fleet, including NEVs, to expand by 60% by 2040.

While road oil demand in emerging markets, excluding China, is projected to continue growing through 2040, offsetting declines in OECD nations and China, where demand is expected to peak in 2025.

Goldman emphasizes that the timing of the road oil peak could vary significantly, ranging from 2025 to after 2040, depending on factors such as economic growth trajectories and NEV adoption rates.

Additionally, Goldman Sachs highlights stronger growth prospects for petrochemical and jet products compared to road oil.

The bank’s projections align with a moderate road oil plateau scenario, situated between lower forecasts from the International Energy Agency and higher estimates from the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries.

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