Along with decreasing oil demand, gasoline usage around the world is expected to peak within the next 10 years, resulting in the world’s largest energy firms moving to natural gas and chemicals. Oil consumption is forecast to grow until 2035 in the form of the petrochemical industry, and this is predicted to offset the declines in some transport fuels.

While gasoline usage is expected to peak within the next decade, the tipping point for oil demand is a matter of debate within the oil industry. Experts predict that by 2035, although oil demand may not have peaked, it will be minimal compared to the demand over the past two decades. By that time, oil demand is expected to plateau in Europe, the US, China and Japan, with only emerging markets making up the vast majority of oil consumption, such as India and other parts of Asia, the Middle East, Latin America and Africa responsible for the bulk of oil usage.

However, while fuel oil and gasoline markets will peak and plateau, consumption of petrochemicals such as diesel and naphtha (used in the petrochemical industry as feedstock) will rise. The petrochemical industry is a saving grace for the oil industry, as this segment is forecast to increase oil consumption feedstock by 50% between 2017 and 2035.

Source: Bloomberg