How much oil will the world need in future? It depends on when the planet reaches “peak oil”, that moment at which consumption hits a maximum and then starts to gradually tail off. The debate over when this might happen, and what happens thereafter, vexes academics, politicians and executives. It’s a pain for shareholders too.
Two variables are particularly important in working out when peak oil will come. First, the speed at which green technologies develop; second, how big a nudge governments give them. At the moment, China is moving faster than hoped towards deploying electric vehicles, for example. But in the US, political backlash has slowed the rollout of renewables.
On balance, however, peak demand is probably being pushed further out into the future. The International Energy Agency’s first “net zero” road map issued in 2021 reckoned that, in order to reach zero emissions by 2050, oil consumption should never recover to its 2019 levels. The world is now well above that. Many now think the peak will come in the early 2030s, and the IEA is reportedly preparing a scenario that nudges it into the 2040s on current policies.