How is Oil Demand Changing for Cars?

With innovative new models like the Audi e-tron, Mercedes-Benz EQC and Mini Electric set to hit showrooms in 2019, the buzz surrounding the EV revolution has never been louder. While exciting times may be ahead for electric car manufacturers, the oil industry is on-track to haemorrhage, with experts maintaining that EVs are displacing demand for hundreds of thousands of barrels per day.

International Energy Agency "calls the top" on oil demand

The latest World Energy Outlook published by the International Energy Agency (IEA) confirm the trend, predicting that while 2019 will usher in an increase in renewable energy use, oil demand from vehicles will peak in the mid-2020s.

That said, analysts note that oil demand from the petrochemical industry, as well as commercial vehicles like trucks, planes and ships, will continue to keep overall oil demand on a positive inclination. Of course, the outlook could quickly change, with demand for transportation industry oil already waning in the face of technologies like electric buses, which currently displace around 233,000 barrels of oil a day.

Europe drives down oil demand

European nations are also transitioning towards cleaner transport, with Italian demand for gasoline slashed by almost 50% since 2005 and German demand for diesel dropping by 9% in the first half of 2018. China, which boasts the world’s biggest automotive manufacturing market, will also play a key role in driving down oil consumption. Come January all chief domestic and foreign manufacturers operating in the People's Republic must meet new electric, hybrid and fuel-cell vehicle requirements. Analysts also predict that while many Chinese-made EVs currently lack international brand value and appeal, they could soon gain momentum on the global market. There are also major improvements in fuel efficiency to consider, including the much-hyped subcompact Mitsubishi Mirage, which delivers up to 37mpg in the city and 43mpg on the highway.

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