Wood Mackenzie says oil demand will peak later than previously thought
Energy analytics firm Wood Mackenzie (WoodMac) now expects oil demand to peak in 2032, two years later than it previously forecast.
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Slower electric vehicle (EV) adoption in the US and Europe, along with sustained growth in petrochemical demand, will push back the timing of peak oil demand, WoodMac said in its Energy Transition Outlook 2025–2026 report.
The growth in artificial intelligence (AI) has driven a surge in global power demand, while mounting global geopolitical tensions “have made 2050 net zero goals unattainable,” the energy analytics firm remarks, adding that the world is now on track for 2.6°C of global warming above pre-industrial levels.
Crude oil and gas are still needed to meet around 80% of rising energy demand, WoodMac said. “Legacy assets in oil, gas and coal remain expensive to retire early, and many governments and firms still view them as vital to energy security and affordability,” it further adds.
In emerging markets like India and Southeast Asia, financial constraints have made it harder to increase the pace of renewables production, leaving fossil fuels to fill the gap, according to WoodMac.
India, Southeast Asia and Africa will be central to new oil demand, which could rise by 5 million b/d between now and 2040, WoodMac said. Oil consumption in China will also play a key role. The country is expected to consume about 16 million b/d of oil this year, WoodMac added.
“Although we expect global oil demand to peak later, much of that outlook depends on EV growth in China and emerging markets,” it said.
At present, most global energy forecasters anticipate that global oil demand will peak around the mid-2030s.
At the lower end of the spectrum, the International Energy Agency (IEA) projects that oil demand will peak by the end of this decade. At the other end, OPEC expects demand to keep rising to 123 million b/d by 2050, up from roughly 104 million b/d this year.
By Aparupa Mazumder
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