Oil demand is projected to reach a level of 104.4 mb/d by 2026

The global oil demand increase over the medium-term period (2020–2026) is estimated at 13.8 million barrels a day (mb/d). However, almost 80% of this incremental demand will materialize within the first three years (2021–2023), primarily as part of the recovery process from the COVID-19 crisis. OECD oil demand is expected to increase by almost 4 mb/d in the period to 2026. However, all of this increase will not be sufficient to return to pre-COVID-19 demand levels. Non-OECD demand is anticipated to increase by almost 10 mb/d over the medium-term, with around half of this increase needed to offset the demand decline in 2020. Using 2019 as the base year for comparison would result in incremental demand of 4.4 mb/d in 2026.

Global oil demand is expected to increase by 17.6 mb/d between 2020 and 2045

Global oil demand is forecast to rise by 17.6 mb/d between 2020 and 2045, growing from 90.6 mb/d in 2020 to 108.2 mb/d in 2045. Long-term projections highlight a contrasting demand picture between continued growing demand in the non-OECD and declining demand in the OECD. This trend is set to start already in the medium-term, before intensifying over the long-term. Indeed, OECD oil demand is projected to peak at levels around 46.6 mb/d in 2023, before it starts a longer-term decline towards a level of 34 mb/d by 2045.

In contrast, oil demand is set to continue to grow in the non-OECD region. Driven by an expanding middle class, high population growth rates and stronger economic growth potential, oil demand in this group of countries is expected to increase by 25.5 mb/d between 2020 and 2045, reaching a level of 74.1 mb/d in 2045. It needs to be noted, however, that almost 5 mb/d of the projected demand increase in the non-OECD will be needed to recover lost demand in 2020.

Global oil demand set to plateau during the second half of the outlook period

Projections highlight the front-loaded pattern for future demand growth. Annual oil demand growth averages 2.6 mb/d during the first five years of the forecast period. Average annual growth is then expected to slow significantly during the second five-year period to 0.6 mb/d, and further to 0.3 mb/d during the period from 2030–2035. After that, projections indicate virtually no growth, hinting at a relatively long period of plateauing oil demand at the global level.

Significant demand increase projected to come from road transportation and aviation sectors

The transportation sector is forecast to be the major contributor to future incremental demand, adding 13 mb/d between 2020 and 2045. More than 90% of this increase is projected to come from the road transportation and aviation sectors, each contributing around 6 mb/d, though a large part of these increases is due to the sharp demand decline in these two sectors in 2020. However, adjusting long-term projections for the demand decline in 2020, the petrochemical sector remains the largest source of incremental demand to 2045, similar to last year’s Outlook.

Long-term oil demand growth will be limited by growing penetration of electric vehicles (EVs)

The total vehicle fleet is expected to reach 2.6 billion by 2045, increasing by around 1.1 billion from the 2020 level. EVs are set to approach 500 million by 2045, representing almost 20% of the global fleet. Some growth is also projected for natural gas vehicles (NGVs), with an expected increase of 80 million projected between 2020 and 2045. As a result, internal combustion engine (ICE) vehicles are set to maintain their leading role in the composition of the global fleet. The outlook sees ICEs constitute about 76% of the global vehicle population by 2045, largely sustained by the fleet size increase in developing regions. These developments are expected to keep road transportation oil demand in a narrow range of 46 mb/d to 46.5 mb/d after 2025.