IEA: Petrochemicals to push oil demand higher despite EVs

According to the World Energy Outlook 2017 released on the agency’s website, Paris-based International Energy Agency revised its projections for the long-term oil prices.

Accordingly, the agency stated that the oil prices are likely to rise towards mid-2020s towards $83 a barrel as global oil demand is expected to remain robust until 2040. However, the switch to electrical cars from fossil fuel-driven ones may slow the demand down.

Oil prices may find balance in the long-term with prices ranging from $50 to $70 a barrel, the agency predicted.

The IEA also stated that 300 million electric vehicles will be on the road as of 2040, compared to 2 million electric vehicles that are currently on the road. However, this is expected to cut only 2.5 million barrels per day (bpd), or about 2%, off global oil demand by that time.

While global oil demand is expected to reach a peak as of 2040, the agency pointed out that sectors such as petrochemicals, truck, aviation and shipping will continue to support the market, boosting oil demand to 105 million b/d.

The United States, meanwhile, is expected to become a major figure in crude oil production on the back of its soaring shale oil output by 2020s.