Medium-term oil demand revised upwards by 1 mb/d in 2021…
The medium-term oil demand outlook shows an increase of 6.2 mb/d from 93 mb/d in 2015 to 99.2 mb/d in 2021. This corresponds to an average annual increase of around 1 mb/d. Compared to last year’s WOO, oil demand in 2021 has been revised upwards by 1 mb/d. The net revision to oil demand in Developing countries is 0.6 mb/d. Within Developing countries, major revisions were made for India which accounted for an increase of 0.5 mb/d, while downward revisions were made to Latin America (–0.2 mb/d) and China (–0.1 mb/d) on the back of a gloomier economic outlook. Demand in OECD Europe (+0.2 mb/d), OECD America (+0.2 mb/d) have been revised upwards by 2021.
During the medium-term, demand in the OECD region is expected to decrease by 0.5 mb/d. Contrary to this, oil demand in Developing countries is expected to grow by 6.4 mb/d. In Eurasia, the medium-term oil demand outlook shows marginal growth of 0.3 mb/d. In terms of refined products, strong demand growth is expected for both light products and middle distillates, particularly in transportation fuels and petrochemicals feedstock.
…but long-term oil demand is revised downwards by 0.4 mb/d in 2040
The Reference Case sees oil demand reaching 109.4 mb/d by 2040. This corresponds to a marginal downward revision of 0.4 mb/d with respect to the WOO 2015. This downward revision is on the back of a further tightening of energy policies and additional technology developments that foster the penetration of alternative fuel vehicles.
Developing countries will continue to lead demand growth, increasing by close to 25 mb/d over the period, to reach 66.1 mb/d by 2040. Eurasia also expands to 6 mb/d by 2040. Demand in the OECD region, however, is expected to fall to 37.3 mb/d by the end of the forecast period, a drop of almost 9 mb/d.
Demand growth comes mainly from the road transportation, petrochemicals and aviation sectors
Over one-third of the total demand increase between 2015 and 2040 comes from the road transportation sector (6.2 mb/d). Strong growth is also foreseen in the petrochemicals sector (3.4 mb/d) with OPEC, Other Asia, China and India accounting for most of the growth, as well as the aviation sector with an addition of 2.8 mb/d by 2040. Aviation demand growth is expected in every region, particularly in China and India, as the growing middle class push demand for aviation services. The only sector where declining oil demand is expected is the electricity generation sector, with 1.3 mb/d of demand anticipated to be removed from this sector between 2015 and 2040.
Future car fleet: increasing, particularly in Developing countries, and more non-conventional
By 2040, the total number of passenger cars is expected to double, increasing from around 1 billion in 2015 to 2.1 billion in 2040. Most of the increase comes from Developing countries.
The car fleet composition is also expected to change significantly in the years ahead. While conventional powertrains (comprising gasoline, liquefied petroleum gas (LPG) and diesel vehicles) are expected to continue to account for most of the passenger cars on the roads, non-conventional powertrains such as natural gas vehicles (NGVs), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs) and fuel cell vehicles (FCVs) are starting to play an increasing role, although they are currently at a very low level.
Overall, non-conventional powertrain passenger vehicles will represent 22% of the passenger car fleet by 2040, up from only 3% in 2014. Most of the growth in non-conventional powertrain passenger vehicles will come from BEVs. By 2040, they are anticipated to account for 6.7% of the car fleet, or a total of 141 million cars.
Driving forces in the road transportation sector: increasing car fleet in Developing countries and declining oil use per vehicle in the OECD region
Demand in the road transportation sector is set to grow by 6.2 mb/d over the forecast period. However, growth is unequally distributed. In the OECD, demand in this sector is expected to drop by 6.7 mb/d between 2015 and 2040 as a strong decline in oil use per vehicle (OPV) – the result of car fleet efficiency improvements, the penetration of alternative fuel vehicles and the declining average vehicle miles travelled (VMT) – far outbalances the moderate increase in the passenger car and commercial vehicle fleet. In Developing countries, however, demand is anticipated to increase by 12.6 mb/d between 2015 and 2040. Contrary to what is foreseen in the OECD, the expected decline in OPV in Developing countries is not enough to compensate for the significant increase in the vehicle fleet.