IEA's global oil forecast
https://iea.blob.core.windows.net/assets/6ff5beb7-a9f9-489f-9d71-fd221b88c66e/Oil2023.pdf is worth reading.
FYI, forecasts are never "right" but they can be directionally useful or at least thought-provoking. I think a forecast that I disagree with is as useful as a forecast that I agree with, if it forced me to study the data and think hard. I don't know if I agree/disagree with this particular forecast or which parts of it; haven't done the work.
Basically, IEA thinks Western oil demand will peak in the very near future, while global demand will continue rising for a while, driven by India and China, before peaking somewhere around the end of this decade. The report explains the rationale and data behind this forecast.
Road fuel is the part of oil demand that IEA expects to peak first, due to EVs and rising ICE mpg.
"The adoption of tighter efficiency standards by regulators, structural changes to the economy and the ever-accelerating penetration of EVs are expected to powerfully moderate annual growth in oil demand throughout the forecast. Road transport demand will rapidly progress towards a post-pandemic peak of 45.3 mb/d in 2025, only marginally above the level of 2019, before embarking on a gradual decline. Globally, road transport oil demand will be 460 kb/d below 2019 levels by 2028. To achieve clear peaks in transport and overall demand, with swift subsequent reductions in use, further policy and behavioural changes will be needed. Gasoline demand will be disproportionately impacted as EVs progressively replace vehicles with internal combustion engines (ICE). About 80% of the 3 mb/d 2022-28 oil demand growth estimated to be displaced by vehicle electrification will be for gasoline. This means that the fuel is likely to exhibit the earliest and most pronounced peak in demand. Usage will never return to 2019 levels and the postpandemic peak could come as early as 2023. Following a brief plateau, the decline is forecast to accelerate from 2026 onwards, with 2028 demand 900 kb/d below that of 2019. Total transport demand will plateau in the second half of our forecast period, with its high-water mark expected in 2026 before ebbing gradually as declines in road use outweigh a continued increase in jet and marine fuels consumption."
I own energy stocks, so will be studying this more closely. If true . . . rising oil demand in India and China may sustain Russia for a period, but may not be as helpful for Western oil & gas names. The US oil states may have a hard couple of decades. The US
really needs to get its EV supply chain together, fortunately the number of battery factories etc here is about to soar.
P.S. Oil and gas is about 35% of Texas’ economy (sum of direct and indirect). Remember how painful each oil bust has been there? Now imagine when oil and gas consumption starts declining for good. Now imagine how it will feel in Saudi!