In a BofA Global Research report sent to Rigzone recently, analysts said they expect total oil consumption levels to reach 107 million barrels per day by 2029, “adding net growth of about 3.7 million barrels per day over the next six-year period”.
“Still, at 600,000 barrels per day year on year on average, oil demand growth into the end of the decade should be a fraction of the rate observed in the past three years,” they added.
In the report, the analysts noted that a Covid-19 demand contraction to 92 million barrels per day in 2020 was offset by three recovery years “where demand grew 3.3 million barrels per day year on year on average”. They highlighted in the report that global oil demand hit a record of around 103 million barrels per day in the third quarter of last year.
“While we see a decelerating trend, we now believe that oil demand will likely continue to grow modestly to 2030 as gasoline lingers on and substitution trends ease,” the analysts noted in the report.
“A mild slowdown in electric vehicle sales growth points to modestly better prospects for light ends. Global oil demand growth into 2029 will be most pronounced in segments that are hard to decarbonize such as airlines and chemical companies,” they added.
“The aviation sector will try to shift to more renewables such as SAF (sustainable aviation fuel), but these alternatives are very expensive and jet fuel demand will remain a key petroleum driver supporting distillates,” they continued.
The analysts also projected in the report that marine transportation will expand into the next decade but added that alternative shipping fuels like LNG and methanol “will make a small dent”.
“Petrochemical feedstock consumption will likely remain the thickest oil market pillar as demand will likely expand into 2050,” they added.
The analysts noted in the report that OECD consumption will likely contract by 1.5 million barrels per day to 44 million barrels per day by 2029 “on aging populations, increased efficiencies, and substitution”.
“Sluggish income growth could play a role too. Instead, emerging markets will keep oil demand on a growth path, although Chinese oil consumption should peak around 2030 as surging EV sales trigger a big slowdown in domestic fuel demand,” they added.
“Meanwhile, India will remain the fastest growing major petroleum market as income per capita catches up. At any rate, the final destination towards net zero emissions does not change, as renewable energy prices drop to become competitive with thermal fuel alternatives,” they continued.
“Following a 2.3 million barrel per day, or 2.3 percent expansion in 2023, oil consumption will likely continue to grow into 2030, but the rate of oil demand growth has likely peaked for good,” they went on to state.
In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) projected that total world consumption will hit 102.42 million barrels per day in 2024 and 103.71 million barrels per day in 2025. According to the STEO, total world demand came in at 101 million barrels per day in 2023.
“We forecast that global consumption of liquid fuels will increase by 1.4 million barrels per day in 2024 and 1.3 million barrels per day in 2025,” the EIA said in its latest STEO.
“Most of the expected liquid fuels demand growth is in non-OECD Asia, led by China and India, which we expect will increase consumption by a combined 0.6 million barrels per day in 2024 and 0.5 million barrels per day in 2025,” it added.
“In OECD countries, liquid fuels consumption stays relatively flat in 2024 and 2025,” the EIA went on to state.
In its previous STEO, which was released last month, the EIA projected that total world consumption would hit 102.46 million barrels per day this year and 103.67 million barrels per day in 2025. That STEO outlined that 2023 oil demand was 101.07 million barrels per day.
“We expect growth in global liquid fuels consumption will be lower over the next two years – forecast consumption grows by 1.4 million barrels per day (1.4 percent), in 2024 and by 1.2 million barrels per day (1.2 percent) in 2025,” the EIA said in that STEO.
“Although growth in 2024 and 2025 is less than the 1.9 million barrel per day growth in 2023, it is largely consistent with the 1.2 percent average annual growth in global liquid fuels consumption over the 20 years from 2004–2023,” it added.
“We attribute the reduction in growth to slowing oil demand growth in China due to stalling GDP growth, increasing vehicle fleet efficiency, and an end to pandemic recovery-related growth in 2023. Despite lower oil demand growth, global consumption of liquid fuels still reaches a new record of over 103.5 million barrels per day in 2025,” the EIA went on to state.
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