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Oil demand to grow even if electric vehicles take off – IEA

Oil&Gas Materials 4 July 2017 13:12

Baku, Azerbaijan, July 4

By Leman Zeynalova – Trend:

The demand for oil in emerging countries is expected to increase in the medium term even if electric vehicles take off, said Paul Simons, deputy executive director at the International Energy Agency (IEA).

“Certainly, electric vehicles will have a big impact on the oil market itself,” he told the CNBC TV channel.

But the IEA analysis also suggests that there will be a lot of oil consumption that will be growing even if electric vehicles are used largely, added Simons.

Simons believes that oil is also used in other industrial spheres and it will be harder to take oil off the system.

According to BP forecasts, the number of electric cars will rise significantly, from 1.2 million in 2015 to around 100 million by 2035 (6 percent of the global fleet).

Around a quarter of these electric vehicles (EVs) are plug-in hybrids (PHEVs), which run on a mix of electric power and oil, and three-quarters are pure battery electric vehicles (BEVs).

“A key driver of the pace at which EVs penetrate the global car fleet is the extent to which fuel economy standards are tightened,” said BP. “But EV penetration will also depend on a number of other factors, including the pace at which battery costs continue to fall; the size and durability of subsidies and other government policies supporting EV ownership; the speed at which the efficiency of conventional vehicles improves; and - crucially – on consumer preferences towards EVs.”

Fuel demand for use in cars will continue to rise, despite efficiency improvements and EV switching, according to BP.

“The growth of electric cars mitigates the growth in oil demand, but the effect is much smaller: the 100 million increase in electric cars reduces oil demand growth by 1.2 million barrels per day. By comparison, this is around a 10th of the impact of the gains in vehicle efficiency,” said the company.

BP expects oil demand to continue to grow throughout the next 20 years, driven by increasing transport demand, particularly in fast-growing Asian economies.

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