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Global oil demand will fall to about 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 held today. held in Dallas on Wednesday.
Demand for crude oil is currently around 102 million barrels per day, and forecasts assume that renewable energy and more efficient motor vehicles increase during this period. However, BP's Michael Cohen said the world will need to continue investing in fossil fuels to ensure an orderly transition to cleaner energy.
Growth in non-OPEC oil supply will outpace growth in demand over the next few years, limiting the Organization of the Petroleum Exporting Countries' ability to add barrels to the global market, Mr. Cohen said.
Market developments will also lead to a change in production and configurations of oil refineries. Refiners will modify their plants to produce more naphtha to replace gasoline, and there will be greater integration of oil and petrochemical operations, Mr. Cohen said.
Gasoline's share of other refined products supplied by refiners will fall to around 15% by 2050, from 25% today. Automakers will continue to build vehicles with internal combustion engines, and the number of miles traveled worldwide will increase, Mr. Cohen said, but lightweight vehicles will be more fuel efficient.
The drop in gasoline demand will particularly affect European refineries, according to Mr. Cohen.
“The Atlantic Basin component of declining refining throughput is the largest of any region,” Mr. Cohen said.
While investments in oil and gas production will remain stable, there will be a massive increase in spending on renewable energy, he added.
