Oil and metals trading house Trafigura expects global oil demand to peak as early as 2030, hit potentially by a faster-than-expected take-up of electric vechiles as the shift to cleaner energy gains pace, its CEO Jeremy Weir said Tuesday.
"It may happen quicker than you think," Weir told the FT Commodities Global Summit in Lausanne. "If you look at the transition in China into electric vehicles, there are somewhere in the region of 200 electric vehicle battery manufacturers in China," he said.
Weir's comments come a week after rival Vitol, the world's largest independent oil trader, said it was looking to place further bets on low-carbon, renewable energy, but still expects global oil demand to continue to grow until the mid-2030s.
Vitol's call on the timing of peak oil demand was in line with that of oil major BP, which last month said it expected global oil demand to "plateau" by 2035.
BP sees more of the world's energy needs being met by renewable fuels in the coming years, a shift exacerbated by curbs on some plastics and the rise of EVs in the transport sector.
But like many of its oil industry peers, BP predicts oil will continue to be a vital part of the global energy mix well beyond 2040.
Indeed, Weir's potentially bullish forecast for the impact of electric vehicles is at odds with the International Energy Agency's latest long-term energy outlook. The IEA estimates that EVs will make up only 20% of car sales in 2040, when the expected 300 million electric cars on the road in will displace just 3.3 million b/d of oil demand growth.
GUNVOR LESS PESSIMISTIC ON DEMAND
Weir predicted "enormous" changes in the physical drivers of the global economy due to the shift to lower carbon energy, making changes in trade flows hard to plan and invest for.
"The switch to lower carbon emissions economics is likely to be disruptive," Weir said. "The commodity transition will put considerable pressures on our trading systems, on the infrastructure we have to move commodities from where they are sourced to where are needed."
"We don't know much about how it will happen and we don't yet know much about how changes in the climate itself will impact global trade," he said.
Also speaking at the event, the CEO of oil and gas trader Gunvor was more conservative in his outlook for the future decline of global oil demand.
"I think that oil demand will grow for the foreseeable future, and if it peaks in the late 2030s, it's probably not unreasonable to think so," he told S&P Global Platts on the sidelines of the event.
Under the IEA's central forecast scenario, world oil demand will rise from 94.8 million b/d in 2017 with no peak before 2040 when it will hit 106.3 million b/d. - Platts -