Road transport fuels drive much of today’s oil demand

From the mid-2030s onwards, the loss in gasoline consumption accelerates with net demand projected to be around 1.8 million bpd lower than current levels by 2040.

At present, the US, China and Europe represent over half of current global gasoline consumption. Demand in all three regions is expected to fall over the outlook period, with the biggest decline forecast in China where gasoline use has already peaked and is projected to more than halve by 2040 compared to 2025 levels.

In contrast, European gasoline demand will continue to increase into the early 2030s before entering an initial shallow decline, with regional demand in 2040 anticipated to be broadly similar to current levels. Despite having the most stringent EV adoption targets, European gasoline demand will continue to benefit from the ongoing shift from diesel to gasoline engines in the passenger car fleet.

The peak in US demand is projected to be slightly earlier, with subsequent larger annual declines post-2035. The US will remain the biggest gasoline market with demand projected to be around 0.8 million bpd lower by the end of the outlook.

Elsewhere, gasoline demand is expected to continue to rise into the next decade, increasing by almost 1.5 million bpd by 2040 as car fleets grow. At this point, these regions could represent around 60% of global gasoline consumption, up from just under half today. African and Middle East demand is expected to peak after 2040.

Despite continued growth in global road transportation, the increasing availability of EVs and plug-in hybrid electric vehicles (PHEVs) for individual and commercial use is transforming the road transport market.

By 2040, the total global car fleet is expected to increase by around 500 million units to nearly 2 billion. Even with continued growth in sales, EVs and PHEVs are still likely to represent around a third1

Forecast based on regulation, consumer behaviour, technology improvements and stated ambitions by Original Equipment Manufacturers (OEMs)

of the total fleet. This underlines the structural challenge of reducing the share of internal combustion engine (ICE) vehicles in the global fleet within typical vehicle turnover cycles.

With a global fleet of around 1.3 billion ICE cars by 2040, liquid fuels are likely to remain material to road transport demand. While a fleet of around 690 million EVs and PHEVs on the road by 2040 could deliver a meaningful reduction in gasoline demand, the scale of displacement will depend on the real-world usage of PHEVs (i.e. the proportion of kilometres driven on battery versus gasoline), as well as regional differences in driving patterns and average vehicle efficiency.

Battery-swapping is a charging innovation particularly for two- and three-wheeled vehicles. In emerging economies where this segment predominates, it could accelerate the electrification of road transport still further. It offers a lower lifetime cost per vehicle, a charging solution where infrastructure or home charging is lacking, and improved time efficiency. Widespread access could also lower the day-to-day running costs of these vehicles against petroleum alternatives, further spurring adoption.

As such, the withdrawal of incentives and the softening or deferral of regulatory targets in some regions has slowed near-term growth. Nevertheless, the global direction of travel continues, underpinned by two factors:

1. Improving cost and capability at the mass-market level
EVs are increasingly able to deliver comparable functionality at close to the cost of an ICE vehicle, a trend expected to accelerate as technology improves and manufacturing efficiencies scale. This is coupled with the roll out of increasingly powerful chargers, significantly reducing charging times.

2. Rising exports from China into emerging markets
With China’s domestic market at around 50% EV/PHEV sales, Chinese Original Equipment Manufacturers (OEMs) are increasingly exporting surplus supply into price-sensitive markets, supporting faster uptake than previously anticipated in emerging markets. This is particularly the case in Central and South America and Asia (excluding China) where the combined EV passenger car fleet is expected to increase by nearly 100 million units by 2040.

Rising new energy vehicle (NEV)1

NEVs in this instance comprise EV, Fuel Cell Vehicles (FCV) and LNG vehicles

penetration progressively reduces the addressable market for gasoline and, over time, diesel. The effect is cumulative and shifts the demand growth trajectory lower, because even as overall mobility demand continues to rise, a growing share of kilometres travelled is served by alternative transport fuels.

The initial pace of decline is expected to be slow compared to gasoline, but begins to gather pace from 2035 onwards, with global consumption falling by 0.9 million bpd to 19.6 million bpd by 2040.

While the adoption of electric light commercial vehicles (LCVs) has underperformed versus our previous assumptions, this has been offset by an increasingly optimistic outlook for eHCVs. China is providing proof of concept1

As of December 2025, 5% of all truck journeys in China were electric powered

initially with a reliance on battery swapping to support scale. The likelihood is that the technology is exported to other markets.

This is significant as the HCV sector currently accounts for 60% of road diesel consumption, with the fleet expected to increase by over 12% to 65 million units by 2040.

This could also apply to other segments like long range coach fleets.

While the bus segment is a small sector for global diesel demand, there will likely be further success in the electrification of urban bus systems – expedited due to the centralised nature of government decision-making. Given that the cost of electric buses compared to ICE equivalents is often lower, this is likely to occur even in locations where low-carbon transport solutions have not been prioritised.