Long term oil demand outlook

As a physical trader of energy, Vitol has long monitored and forecast demand for crude oil and products.

In the context of an evolving energy mix, here we highlight some of our current thinking given the information we have at present.

Explore report

Long term oil demand outlook - Executive summary

To 2040, there is likely no global reduction in overall oil consumption.

Declining demand from the middle of next decade only reverses the year-on-year increase in oil use over the next few years. Demand in 2040, is expected to be on a par with today.

Gasoline and gasoil demand is moderating and is anticipated to fall as the electrification of road transport continues and gasoil use in other sectors declines.

The outlook for these road transport fuels – at around half the barrel – is shaping the global oil demand trajectory.

In the absence of any disruptive technologies over the forecast horizon, jet fuel and LPG demand (for residential and commercial use and petrochemical feedstocks) are expected to continue to rise.

If, however, adoption of electric vehicles (EVs) stalls, and targets were to be pushed back by just 5 years, road transport fuel demand could be 2-3 million bpd higher in 2040 than current projections.

This report outlines our view on future oil demand and the factors that may affect it. We take into account current sectoral trends including factors we think are likely to influence the availability and adoption of sustainable solutions. However, we are mindful that some key influencing factors may change and our future outlook be adjusted accordingly.

We look over a 15-year horizon to 2040 because this ties in roughly with technological cycles and broadly matches vehicle fleet turnover patterns. Beyond 15 years, it is harder to anticipate how influencing factors will evolve, leading to higher levels of uncertainty.

The product profile of the barrel changes over the outlook

By 2040, oil demand is expected to return to current levels. The profile of the barrel will likely shift as demand for gasoline and gasoil begins to fall.