Delayed Energy Transition Oils: A Crude Awakening?

The energy transition is facing numerous hurdles even as progress is made in some corners of the global energy balance. One outstanding achievement is found in China where; to cite one example, rapid penetration of electric vehicles is slowing its oil demand growth. Another success is the inroad of LNG and batteries into the commercial trucking sector in China. Yet, we can expect the pace of electrification in the US road sector to downshift. Progress towards a low-carbon energy system is stumbling on three fronts: energy security, geopolitics, and rising costs. This Insight examines what a Delayed Energy Transition scenario means for oil and refining. In the scenario, the pace of the energy transition is delayed for five years compared to our base case. The effect is dramatic.