Buckle Up: Goldman Sachs Forecasts Global Road Oil Demand to Peak by 2032
Hold on to your seats because according to Goldman Sachs, global road oil demand is set to skyrocket by 5 percent, reaching a peak of 50 million barrels per day by 2032. But don’t rev your engines just yet, as the investment bank predicts a sharp decline in oil use per vehicle due to the rise of electric vehicles, which are expected to dominate more than half of auto sales by 2040, as reported by Reuters.
Get ready for a wild ride as Goldman envisions global road oil demand slowly tapering off after reaching its peak, remaining 4 percent above 2023 levels by 2040. With a surge in the global number of vehicles balancing out the decrease in oil consumption per vehicle, the bank anticipates a rollercoaster of changes in different countries, detailed in a note released on Monday.
Goldman points out that out of the 1.7 billion vehicles worldwide, 47 percent of 2023 oil demand was driven by gasoline consumption, with the emergence of new electric vehicles causing a dent in oil demand. These new electric vehicles, categorized as battery vehicles and plug-in hybrids (but not traditional hybrids), are steering the future of road oil consumption.
Hold on tight as Goldman predicts a whopping 65 percent decrease in oil use per vehicle by 2040, thanks to the rise of New Energy Vehicles (NEVs) and improvements in internal combustion engine efficiency, bringing the annual consumption down to 285 gallons per vehicle.
Gear up for a 60 percent increase in the global number of vehicles, including NEVs, by 2040, as Goldman sets the stage for a dramatic shift in the automotive landscape.
While road oil demand in emerging markets outside of China is expected to climb steadily through 2040, offsetting the decline in OECD nations and the imminent peak in China by 2025, Goldman warns that the timing of the road oil peak could vary widely depending on economic growth and NEV adoption rates. In the fast lane, petrochemical and jet products show stronger growth potential, according to the bank.
Goldman’s forecast for a prolonged road oil plateau falls between the conservative estimates of the International Energy Agency and the more optimistic projections of the US Energy Information Administration and the Organization of the Petroleum Exporting Countries (OPEC). So fasten your seatbelts and stay tuned for the thrilling twists and turns in the global road oil demand landscape.