In June, the International Energy Agency (IEA) forecast peak oil demand growth in less than six years. Later that same month, the Energy Institute revealed demand is still growing and where it declines, the declines are minuscule, especially for the big corps.
While the two reports paint two rather different pictures, they also offer a glimpse into the actual future of oil demand and supply, especially viewed in the context of trends like a slowdown in U.S. oil output and China’s recent boost in local oil and gas exploration.
In the world as it actually is, EV adoption is experiencing a slowdown, and while this week’s second-quarter sales figures from Big Auto suggest a partial reversal, the bombastic predictions of an EV revolution remain unfulfilled.
Tesla, the world’s bestseller, posting lower than expected deliveries in the second quarter.
At the same time, however, GM reported a 40% increase in EV sales for the second quarter. It is doubtful if this should be cause for celebration seeing as the carmaker is actually losing money on every EV it sells but GM still tries to put a positive spin on it.
At the same time, it rose by 5% in Asia, which includes the world’s biggest EV market, China. In fairness, this growth in oil demand is slowing down, at least in China.
Imports of crude oil have trended lower than expected since the start of the year and while it could be argued that expectations may have been unrealistic, the decline is affecting the outlook on demand.
The latest comes from McKinsey and reveals that close to half of American EV drivers would be willing to switch back to internal combustion engine vehicles.
Globally, in the 15 countries where McKinsey conducted the survey, the percentage was lower, at 29%, but still significant when we are talking about a revolution and displacement of internal combustion technology.
EV’s have certainly had an impact on oil demand—in China. In other parts of the world, namely Europe and North America, the growth in EV sales has had a negligible impact on oil demand, which, per the Energy Institute, fell by 1% in Europe and 0.8% in North America.
Sinopec, the state energy giant and the world’s biggest refiner, reported in May that it expected demand growth in the country to peak in three years.
It is not only China that needs to be paid attention when it comes to oil demand prospects.
The minor demand declines in Europe and North America are more proof that the destruction of demand for oil that the energy transition was expected to bring about is not happening.
Even in Norway, the biggest per-capita EV adopter nation, demand for oil has not, in fact, declined as the number of EV’s on the roads rose.
Neither has the EU’s thirst for natural gas declined as it builds ever more wind and solar.
The latest update revealed that Europe imported 23% more gas from Russia in June than a year ago, despite the sanction push against every type of Russian hydrocarbon. In the previous month, Russian gas imports even exceeded imports from the United States.
A lot of forecasts predict an end to the hydrocarbon’s. Yet the reality is that oil and gas—and coal, too—are here to stay for a long time, even if demand starts growing more slowly or even stops growing at some point, in post-industrial societies.
The problem of these post-industrial societies is that they need the output of industrialized ones and industrialization is inevitably tied to the cheap, round-the-clock energy provided by hydrocarbons. Oil demand doom is nowhere near looming.
Oil Price.com / ABC Flash Point News 2024.
Every item we use, from plastics, to cleaning products contains fossil fuel ingredients.
For so far only the small oil enterprises have been banned by the banks, the giant companies are still even more money to develop their business for the future?