Road oil demand to peak by 2032 as EVs become more common, Goldman forecasts

Goldman said the 1.7 billion global vehicles drove 47 per cent of 2023 oil demand, with gasoline consumption driving about half of road demand.

Global road oil demand will rise five per cent to a peak of 50 million barrels per day by 2032, Goldman Sachs forecasts, with oil use per vehicle likely to fall sharply because electric vehicles are expected to account for more than half of auto sales by 2040.

The investment bank sees global road oil demand edging down along a long plateau after the peak and remaining four per cent above 2023 levels by 2040, as a rise in the global number of vehicles nearly offsets the decline in oil consumption per vehicle. It expects large differences in the peak’s timing in different countries, it said in a note published on Monday.

Goldman said the 1.7 billion global vehicles drove 47 per cent of 2023 oil demand, with gasoline consumption driving about half of road demand. It highlighted that new electric vehicles (NEVs), which it defines as battery vehicles and plug-in hybrids but not traditional hybrids, are now weighing on oil demand.

The bank expects the rise of NEVs and internal combustion engine efficiency gains to reduce oil use per vehicle by 65 per cent to 285 gallons per vehicle a year by 2040.

Goldman expects the global number of vehicles, including NEVs, to grow by 60 per cent by 2040.

Road oil demand in emerging markets excluding China is seen growing through 2040, which roughly offsets ongoing declines in OECD nations and soon in China, where demand is expected to peak in 2025, Goldman said.

Goldman said the timing of the road oil peak could range from 2025 to after 2040 under alternative paths for economic growth and NEVs. Petrochemical and jet products have firmer growth prospects, the bank added.

Goldman’s base case of a long road oil plateau sits between the lower International Energy Agency forecast and higher U.S. Energy Information Administration and Organization of the Petroleum Exporting Countries forecasts.