Exactly when the world’s thirst for oil starts to ebb as a shift to cleaner, renewable energy gathers pace is increasingly occupying forecasters on both sides of the debate.
The booming growth of renewable energy and high hopes for electric cars are seen equally as a challenge or a panacea by the producers of fossil fuels and environmental groups alike.
Last month saw the dial appear to shift in favor of the latter, however, after BP became the first Western supermajor to pinpoint an inflection point in the world’s need for oil.
Tamed by a steady surge of wind and solar power, electric cars, more frugal vehicles and curbs on some plastics, Europe’s number two producer now sees oil demand peaking in the “late 2030”. A year ago it expected oil demand to rise beyond 2040.
The actual timing of the peak is less important than the direction of travel.
Updating its influential long-term Energy Outlook, BP’s less rosy outlook for oil demand speaks volumes to the growing concerns in many quarters that the world may be on a lot faster, and potentially more traumatic, path to energy transition than previously expected.
Until now, everyone in the oil industry— with the exception of Norway’s Statoil— expected oil demand to keep growing over the next two decades, albeit at a slowing pace.
Even the International Energy Agency still believes oil demand will continue to rise through 2040.
BP’s latest report shows how far oil companies have come in their public narrative as they face a world beyond oil.
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