OPEC predicts market to plateau at 109 million barrels
What’s with OPEC these days? The usually very staid Organization of Petroleum Exporting Countries (OPEC) has apparently taken to reading tea leaves, and it looks like they need a few lessons because their predictions may not be all that solid.
With internal combustion engines (ICE) going the way of the dinosaurs, it’s quite likely that gasoline use will drop substantially by 2040. But, OPEC, which represents the world’s major oil producers, doesn’t see it that way.
Its analysts believe that even though electric vehicle sales may shoot through the roof global oil demand won’t peak until 2040. And, it honestly expects demand to continue to rise. The reason is that the organization believes ICE technology won’t be bumped from the catbird’s seat for decades unless something happens to push electric vehicle sales.
Biggest economies are already committed to change
However, with two of the globe’s biggest economies, China and India committed to transforming their vehicle fleets radically due to air pollution levels. And with at least nearly another dozen countries following suit, it’s tough to see how OPEC can be as optimistic as it is about oil consumption. The nations are Japan, South Korea, Austria, Germany, France, Denmark, Norway, Spain, Portugal, the Netherlands, and Ireland.
And a study – the Digital Auto Report of 2017 – predicts that by 2025 58 percent of all new-car sales will be some form of electric, full electric/plug-in hybrid or strong/mild hybrid. The study predicts that as many as 458 million “connected” (electric) cars or trucks will be on the road. Given those numbers, it’s hard to see how OPEC can maintain its optimism.
Indeed, OPEC believes that while global oil production could plateau at 109 million barrels per day by 2040. However, the organization believes that petroleum production will continue to expand.
OPEC remains bullish on petroleum, seeing only eight percent of all light vehicles as battery powered by 2040. A report by Bloomberg New Energy Finance differs dramatically, coming down on the side of the Digital Auto Report. Bloomberg said by 2040 a-third of all cars will be electric.
Ride-sharing, ride-hailing may have long-lasting effect
While OPEC remains confident about its prediction, some trends are working to overturn its thinking. For example, there are predictions that car-sharing and ride-hailing services – Lyft and Uber – could speed the decline in oil demand by fully seven percent in 2040. And, such services in China might cut the size of the car fleet and cause demand to peak far earlier, 2035, before dropping off over the next five years.
Categories: Automotive News