According to a report released last October by the International Energy Agency (IEA) in Paris, global demand for oil is expected to peak before 2030 due to the strong momentum of the clean energy transition.
The IEA predicts that by the end of this century, the proportion of oil, natural gas, and coal in the global energy supply will drop to 73%, down from the long-standing level of about 80%.
“This is a significant shift,” the IEA noted.
However, analysts at Goldman Sachs have a more optimistic view of oil's prospects. They now forecast that by 2030, oil demand will rise to 108.5 million barrels per day, up from the previous estimate of 106 million barrels per day.
They added that the peak oil demand will reach 110 million barrels per day in 2034 and then remain at that level until 2040.
Among various oil products, gasoline demand is expected to peak within four years, while middle distillates (diesel and aviation fuel) will peak in the mid-2030s. Regionally, emerging markets in Asia are expected to drive most of the global oil demand growth.
Partially supporting this outlook is the recent stagnation in electric vehicle sales. Goldman Sachs analysts stated that this trend increases the likelihood of a slow adoption of non-combustion engines. In this scenario, oil demand could continue to grow, reaching 113 million barrels per day by 2040.
“The electric vehicle market faces some headwinds—subsidies for electric vehicles in some European markets are being reduced, ongoing price competition is increasing pressure on original equipment manufacturers' profits, and the pace of new electric vehicle investments is slowing,” Goldman Sachs analysts wrote in a report to clients.
Meanwhile, supply is expected to remain constrained in the medium term due to slowed capital expenditures in crude oil and related product production.
Based on their analysis, Goldman Sachs forecasts that future Brent crude oil prices will range between $75 and $90 per barrel.
