Vitol has pushed global oil demand higher and further into the future, citing slower EV uptake and resilient transport fuel use.
Summary:
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Vitol has lifted its long-term oil demand outlook, with global consumption now seen peaking at around 112 million barrels per day.
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Peak demand is pushed back to the mid-2030s, driven mainly by slower electrification in road transport.
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Oil demand in 2040 is now expected to be around 5 million bpd higher than current levels.
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Slower EV adoption in the US and parts of Asia is only partly offset by faster uptake in emerging markets and electric heavy vehicles.
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Jet fuel and LPG demand are expected to keep rising in the absence of disruptive technologies.
Global oil demand is likely to be higher for longer than previously expected, according to Vitol’s latest long-term outlook, as slower adoption of electric vehicles delays the peak in consumption and keeps road transport fuels central to the energy mix.
In its updated assessment, Vitol estimates that global oil demand could reach a peak of around 112 million barrels per day at its height, with the timing of peak consumption now pushed back to the mid-2030s. This marks a notable shift from the group’s earlier projections, which had anticipated demand levelling off earlier in the next decade.
The revised outlook reflects changes in assumptions around electric vehicle uptake. Vitol now expects slower near-term adoption of passenger EVs in the United States and parts of Asia, prompting it to align its base case more closely with a lower-EV-penetration scenario. While faster adoption in emerging markets and a more optimistic outlook for electric heavy commercial vehicles offer some offset, analysts say these trends are insufficient to materially accelerate the decline in oil demand.
Road transport fuels remain the dominant driver of the overall demand trajectory, accounting for roughly half of global oil consumption today. As a result, even modest delays in electrification translate into meaningful changes to long-term demand projections. Under the updated outlook, oil demand in 2040 is expected to be around 5 million barrels per day higher than today, with only limited decline during the latter part of the next decade.
While gasoline and gasoil demand are expected to moderate over time as electrification progresses and industrial use declines, other parts of the barrel continue to show resilience. In particular, jet fuel and liquefied petroleum gas are projected to keep rising in the absence of disruptive technologies, supported by aviation growth and ongoing demand from residential, commercial and petrochemical uses.
Vitol stresses that the outlook is subject to considerable uncertainty. Should EV adoption stall further or policy targets continue to be delayed, road transport fuel demand in 2040 could exceed current projections. Conversely, petrochemical feedstocks and oil burn face greater downside risk if technology adoption accelerates or macroeconomic conditions weaken.
Overall, analysts see Vitol’s outlook as reinforcing the view that oil’s decline is likely to be slower and less linear than many policy-driven scenarios suggest.
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Vitol is the world’s largest independent energy trader, handling millions of barrels of crude oil and refined products each day. Headquartered in Europe, the privately held firm plays a major role across global oil, gas, power and carbon markets, giving it a unique, real-time view of supply, demand and price dynamics.
This article was written by Eamonn Sheridan at investinglive.com.