Peak oil demand is still a decade away – Goldman Sachs

Global oil demand is expected to grow next decade as well, with increased oil usage primarily from emerging markets in Asia, according to a report by Goldman Sachs Research.

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Oil demand is forecast to peak at 110 million b/d by 2034, according to Goldman Sachs Research. If electric vehicle (EV) adoption is slower, then oil demand could continue to increase, reaching 113 million b/d by 2040, the report states.

Growing Asian economies will be at the forefront of oil demand, while a slower adoption rate for EVs, primarily due to subdued investments and technical issues, will extend the timeline for reaching peak oil demand, the report argued.

The bank predicts that China will see steady growth in oil demand as the country’s gross domestic product (GDP) per capita growth continues to rise and become a "high-income economy" in this decade.

“We think peak demand is another decade away, and more importantly, after the decade it takes to peak, it plateaus, rather than sharply declines, for another few years,” two analysts from Goldman Sachs’ research team wrote in the report.

In a completely opposite view, prominent forecasters, including the Paris-based International Energy Agency (IEA), predict that oil demand will peak before 2030. According to the IEA, global demand will “level off” at around 106 million b/d toward the end of this decade. This projection is based on a scenario where power plants move away from burning oil and make “accelerating transition to clean energy technologies,”

Several climate analysts as well as the IEA argue that transitioning from fossil-based energy resources to cleaner, more efficient sources is crucial for achieving a sustainable life on Earth and mitigating the extensive impacts of global climate change.

A recent analysis by the World Weather Attribution (WWA) initiative found that climate change has made the current extreme temperatures in India more common than they would have been without climate change.

The environmental NGO Greenpeace has also warned about the dangers of delaying peak oil demand. “The science is clear: we cannot continue burning coal, oil, and gas if we are going to avoid the worst impacts of the climate crisis,” Greenpeace said in a report. “We need to take transformative action in the next decade to completely phase out fossil fuel production and transition our economy to 100% renewable energy,” the organisation added.

By Aparupa Mazumder 

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