Organization of the Petroleum Exporting Countries (OPEC) said on Thursday that world oil demand will plateau in the late 2030s and could by then have begun to decline.
OPEC prediction, made in its 2020 World Oil Outlook, comes amid a growing number of other forecasts that the pandemic may prove the tipping point for peak oil demand.
Last month, BP said that we may have already passed peak oil demand, while another major, France’s Total, sees oil demand growing until 2030.
OPEC said oil use will rise to 107.2 million barrels per day (bpd) in 2030 from 90.7 million bpd in 2020, 1.1 million bpd below its 2030 forecast last year and over 10 million bpd below its 2007 prediction of 2030 demand.
The report, which looks at the 2019-2045 timespan said: “Global oil demand will grow at relatively healthy rates during the first part of the forecast period before demand plateaus during the second half,”.
While oil used to fuel cars, trucks and industry will rebound as economies recover, OPEC voiced concern future growth may be partly offset by factors like a post-pandemic shift to homeworking and teleconferencing over commuting, as well as efficiency improvements and a shift to electric cars.
OPEC has been concerned the pandemic could hit demand permanently, which current and former officials say could pressure oil prices and challenge its efforts to balance the market.
This year OPEC, with Russia and other allies, a grouping is known as OPEC+, agreed on record output cuts of 9.7 million bpd, the equivalent of 10% of global supply.
OPEC still sees oil demand rising in the next few years, unlike some others.
It predicts oil use will jump to 97.7 million bpd next year, reaching 99.8 million bpd in 2022 – above the 2019 level – and grow to 102.6 million bpd by 2024. The 2024 figure is less than last year’s forecast.
OPEC forecast it will pump more in 2021 than this year’s expected 30.7 million bpd, but rising supply from the United States and other outside producers means OPEC output in 2025 will likely be 33.2 million bpd, below 2019’s level, it said.
Longer-term, its reference case is for oil demand to reach 109.3 million bpd in 2040 and decline slightly to 109.1 million bpd by 2045.
OPEC said the pandemic had accelerated a trend for lower oil use in industrialised Organisation for Economic Cooperation and Development countries, and non-OECD growth.
Electric cars are gaining share and there is “a constant improvement in battery economics”, OPEC said. They will account for over 27% of new cars globally by 2045.
Nonetheless, OPEC still hopes to boost production in the coming decades as rival output declines.
OPEC Secretary-General Mohammad Barkindo wrote in the foreword to the report that “Oil will continue to account for the largest share of the energy mix by 2045,”.