At its height, global oil demand could reach around 112 million bpd

Demand growth is expected to be driven by petroleum products used in the production of plastics and aviation.

Oil fuels for road transport – principally gasoline and diesel – dominate demand at 46% of the global barrel and the outlook for these fuels underpins the overall forecast. The adoption of EVs – primarily passenger cars – represents the main decarbonisation solution at tailpipe and available at a scale that could moderate oil demand.

Declining gasoil demand within the residential sector – as consumers adopt sustainable heating solutions – is also expected to contribute to falling consumption. By 2040, total gasoline and gasoil demand (in all categories) is anticipated to fall to represent just under half of the barrel.

The expected outlook for most of the remainder of the barrel is one of rising demand and no disruptive technologies at present that could reasonably reduce reliance on oil products at scale.

Rising populations, incomes, and urbanisation is increasing demand globally for plastics, and in developing economies for fuels used in residential and small-scale commercial activities. It is anticipated that naphtha and LPG will consequently increase in relative importance over the outlook – facilitated by the supply of natural gas liquids (NGLs) – to represent over a quarter of the demand barrel by 2040 – up from a fifth today.

As people become wealthier and fly more, jet fuel demand is expected to increase to represent 9% of the demand barrel by 2040, from 7% today. The adoption of sustainable aviation fuel (SAF) will likely increase over the forecast period as mandates come into effect, but is unlikely to be high enough to change a rising trend for petroleum-derived jet fuel consumption.

A changed landscape
Over the past year, decarbonisation policies have become a less decisive driver of efforts to curb oil consumption and reduce CO₂ emissions. Policy priorities have increasingly been reframed around economic competitiveness and geopolitical strategy.
At the same time, technological progress and China’s strategic ambitions – supported by industrial scale and cost reductions – have lowered the cost of Chinese EVs and clean technologies, accelerating their deployment across most markets.

Population growth, rising incomes, and continued urbanisation are sustaining underlying demand for mobility, plastics, chemicals, and energy – and, by extension, oil. This dynamic is reinforced in several regions by a stronger industrial policy orientation, with a greater emphasis on domestic competitiveness and security of supply.

Looking ahead, the trajectory of decarbonisation over the next 15 years will be determined less by stated targets and more by the availability, scalability, and affordability of practical alternatives. This is alongside the cost and feasibility of adoption.