BAKU, Azerbaijan, Oct.9
By Leman Zeynalova – Trend:
With the exception of 2020 to 2023, the share of the transportation sector in global oil demand will remain in a fairly narrow range of 57 to 58 percent, although some shifts in the share between various transport modes will be inevitable, Trend reports with reference to OPEC’s World Oil Outlook (WOO) 2020.
“Moreover, the transportation sector will be the major contributor to future incremental demand. Combining all transport modes together, demand will grow by 5.6 mb/d between 2019 and 2045. The largest demand for oil comes from road transportation, which in 2019 represented 45% of global demand at 44.4 mb/d. Demand in this sector was hit hard by COVID-19 lockdowns in 2020, falling by more than 4 mb/d compared to 2019.
“Over the medium- and long-term, however, oil demand in road transportation is expected to grow to 47 mb/d in 2045. In the years to come, this sector is forecast to experience a strong decoupling between oil demand and transport services and the number of vehicles on the road. This will primarily result from efficiency improvements driven by technological developments, the tightening of energy policies and an increasing penetration of EVs, natural gas and to some extent hydrogen as fuel sources.
“Turning to aviation, this sector was most affected by COVID-19 restrictions in relative terms. Oil demand declined by almost 50 percent during 2020 on an annual basis. Demand is projected to recover partially in 2021 and will grow thereafter, though it will likely reach 2019 levels only in 2023–2024. In fact, aviation is projected to be the fastest growing sector in relative terms, with oil demand growing at 1.3% p.a. on average between 2019 and 2045. On a volume basis, this corresponds to incremental demand of 2.8 mb/d, rising from 6.7 mb/d in 2019 to 9.4 mb/d in 2045. Some growth is also projected in the marine sector, as well as in rail and domestic waterways. The average rate of growth, however, is much slower than in aviation, at 0.4% p.a. (marine) and 0.3% p.a. (rail and domestic waterways).
“Compared to the transportation sector, the industrial use of oil is much lower. Moreover, the larger and growing part of industrial demand is for non-energy purposes as a feedstock for the petrochemical industry to produce plastics and chemicals. Demand for these products is strongly linked to economic growth, hence the signposts for oil demand in this segment hint at strong growth. Indeed, the petrochemical sector is actually the largest single contributor to incremental oil demand over the forecast period, growing by 3.7 mb/d,” reads the report.
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