Oil use in cars is set to peak within seven years, according to the International Energy Agency, despite the number of motor vehicles on the road growing rapidly as populations swell and people become wealthier.
Ever since the first Model T Ford rolled off the production line in 1908, cars and oil have shared a relationship that has transformed the world. But the IEA said oil consumption in cars will hit a ceiling by the middle of the next decade as adoption of electric vehicles becomes more widespread and more fuel-efficient automobiles hit the road, offsetting the increase in numbers of drivers in emerging market countries.
"After 2025, efficiency measures and alternative fuels continue to suppress demand," said the Paris-based energy body, with growth slowing even in developing economies such as China.
Global oil demand from cars makes up 21.4 million barrels a day of the close to 100m b/d consumed in the world. This will rise to just over 23 million b/d in the late 2020s, after which car consumption falls back to current levels by 2040, even as global car numbers increase by 80 per cent.
Total consumption across motor vehicles, aeroplanes, ships, trucks and the petrochemicals sector is set to grow between now and 2040 at half the rate of the last two decades, the energy body added.
After a 24 per cent jump in total oil consumption between 2000 and 2017 to 95 million barrels a day, absolute demand increases by only 12 per cent in the years to 2040 to 106 million b/d, the IEA said.
The forecasts were made as part of the Paris-based energy body’s annual long-term outlook, reflecting global government policy ambitions. Companies such as Tesla are leading the fight against oil use, with as many as 300m electric cars forecast to be running by 2040 forecast that will curb oil demand by 3 million b/d.
But the bigger impact will come from more economical fuel standards in conventional cars, which will reduce consumption by 9m b/d. “Improvements in fuel efficiency of the global car fleet are the single largest contributor to moderating oil demand growth in cars,” the IEA said.
Biofuels will offset 2.5 million b/d of oil demand by 2040, while natural gas usage in cars offsets 1.6 million b/d.
The IEA forecasts that oil demand will fall sharply in advanced economies, with the EU seeing a 45 per cent decline by 2040, while North America falls by 25 per cent. – Copyright The Financial Times Limited 2018