End of cycle We will never again consume the amount of gasoline in the world that we burned before the pandemic. 2019 will go down in history as the historic peak of this fuel. The rise of the electric car is beginning to displace the demand for this fuel. Forever.
Because the energy transition and the push for renewables will mark a turning point in the market throughout this decade, according to the latest study by the International Energy Agency (IEA), entitled Oil 2023, which it was broadcast yesterday.
Let's start with the quintessential fossil fuel, oil. Global demand for black gold will peak in 2028. From then on, it will begin a slow decline. It is the realization of the so-called peak of demand, as they say in English, which for years analysts denied that it would happen.
“Demand for oil from fossil fuels – which excludes biofuels, petrochemical feedstocks and other non-energy uses – will peak at 81.6 million barrels per day (mb/d) in 2028. Growth will turn negative after 2023 for petrol and after 2026 for transport fuels in general. These trends are the result of a turn towards low-emission sources triggered by the global energy crisis, as well as the political emphasis on improving efficiency in the rapid growth of electric vehicle sales", they explain in the report
"Post-pandemic changes in consumer behavior pose an additional burden on fuel consumption for transport, as hybrid work and video conferencing have taken hold in some business sectors in advanced economies," explain the analysts. We are, therefore, facing a change in behavior and productive model, in contrast to what was experienced from the 20th century onwards.
As was said at the beginning, among the different types of fuel, gasoline is the one destined to decline before the others. Its demand “will be disproportionately affected as electric vehicles gradually replace vehicles with internal combustion engines. Its consumption will never return to 2019 levels and the post-pandemic peak could come this year. In terms of total transportation fuel demand, it will stabilize and reach its peak in 2026, before declining.”
Will this change in trend be enough to reach the goal of net zero emissions in 2050? This is the question. At the time, the IEA calculated that global oil demand should fall to around 75 million b/d in 2030. In its medium-term forecasts, published yesterday, this body estimates that oil demand ( as a whole) will be around 106 million b/d in 2028. So it doesn't look like we're on the pace we want.
Among other things, because the aviation sector will experience a slightly different trend from the rest of the fuels (such as petrol). Kerosene will expand strongly as air travel returns to normal following the reopening of borders. At the beginning of 2023, demand was still below 2019 (13% less).
Energy consumption in aviation will continue to increase and will recover to pre-pandemic levels in 2027, eight years after covid.
