Global oil demand will fall to around 80 million to 100 million barrels per day by 2035 in a net-zero environment, BP’s chief U.S. economist told an energy conference in Dallas on Wednesday.
Crude oil demand is about 102 million barrels of oil per day now, and the forecast assumes renewables and more efficient motor vehicles increase over that period. But BP’s Michael Cohen said the world will need continued investment in fossil fuels to ensure an orderly transition to cleaner energy.
Non-OPEC oil supply growth will exceed demand growth over the next several years, limiting the ability of the Organization of the Petroleum Exporting Countries to add more barrels to the global market, Cohen said.
Market changes also will produce a shift in output and configurations at oil refineries. Refiners will shift their plants to produce more naphtha to replace gasoline, and there will be greater integration of oil and petrochemical operations, Cohen said.
The portion of gasoline compared with other refined products supplied by refiners will drop to about 15% by 2050, from 25% today, he said. Automakers will continue to build internal combustible engine vehicles, and there will be more miles driven worldwide, Cohen said, but light vehicles will be more fuel-efficient.
The drop in gasoline demand will particularly affect European refineries, Cohen said.
“The Atlantic Basin component of refining throughput declines is the largest of any of the different regions,” said Cohen.
While investment in oil and gas production will remain stable, there will be a massive increase in spending on renewable energy, he said.
(Reporting by Georgina McCartney and Curtis Williams in Houston; editing by Jonathan Oatis)