Global road oil Goldman Sachs predicts that the demand for oil will increase by five percent, reaching a peak of 50 million barrels per day by 2032. However, the use of oil per vehicle is likely to decrease significantly. Electric cars are expected to make up more than half of all auto sales by 2040. More than half of all car sales by 2040 are expected to be electric vehicles.
After reaching the peak, global demand for road oil is expected to slightly decrease but remain four percent above 2023 levels by 2040. Despite the decline in oil consumption per vehicle, the increase in the global number of vehicles is predicted to offset this reduction. The timing of the peak is expected to vary in different countries according to the investment bank's note on Monday.
Goldman points out that new electric vehicles, including battery vehicles and plug-in hybrids, are now impacting oil demand, even though traditional hybrids are not included in this category. These vehicles drove 47 percent of the oil demand in 2023, with gasoline use accounting for approximately half of the demand.
The bank anticipates that the rise of new electric vehicles and improvements in the efficiency of internal combustion engines will lead to a 65 percent reduction in oil consumption per vehicle, bringing it down to 285 gallons per vehicle per year by 2040.
According to Goldman, the global number of vehicles, including new electric vehicles, is expected to grow by 60 percent by 2040.
While demand for road oil is projected to decrease in OECD nations and soon in China, where it is expected to reach its highest point in 2025, it is anticipated to continue growing in emerging markets, offsetting the decline, as stated by Goldman.
Goldman emphasizes that the timing of the peak of road oil demand could range from 2025 to after 2040 depending on various economic growth and new electric vehicle scenarios. Additionally, the bank mentioned that there are stronger growth prospects for petrochemical and jet products.
Goldman's prediction for a long period of stable road oil demand falls between the lower forecast by the International Energy Agency and the higher forecasts by the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries.
