The Rise and Fall of Black Gold
How will peak oil demand impact your business? Scroll down to find out...
Peak oil demand: just around the corner?
The market used to worry about peak oil supply. Now the focus has shifted to peak oil demand as the industry witnesses a structural decline in demand from the developed world, and questions the appetite of the emerging world to grow at the insatiable rates experienced over the past fifteen years. Specifically, the pace of technological change – in transport and energy storage, among other things – is fuelling the debate.
Growth in transport stutters: gasoline is the weakest link
The petrochemical sector is one of the few bright spots for oil demand
Petrochemical feedstocks make up just over 10% of total oil demand but we see significant growth over the next 20 years. Feedstocks are forecast to add 6 million barrels a day to total demand by 2035 – growing 50% from today’s 12 million barrels a day. Feedstocks include naphtha, LPG, and notably ethane – considered ‘oil’ when consumed by petrochemical plants as a feedstock.
Our demand outlook poses challenges to refining.
As demand for jet fuel (kerosene) and diesel fuel (gasoil) grows against a backdrop of declining gasoline demand, the refining sector reverts to being distillate-led. This transition is further supported by the forthcoming marine fuel regulation which mandates that the international shipping community use fuels with 0.5% sulphur or equivalent as of 2020 – down from today’s mandate of 3.5%.