Goldman Sachs Forecasts Global Oil Demand To Peak In 2034 Due To EV Trends
Goldman Sachs has revised its global oil demand forecast for 2030, predicting consumption will peak by 2034 due to a potential slowdown in electric vehicle (EV) adoption. This outlook suggests that refineries will operate at higher-than-average rates until the end of the year, Reuters reported.
According to a report led by analyst Nikhil Bhandari, Goldman Sachs has increased its 2030 crude oil demand forecast to 108.5 million barrels per day (bpd) from the previous 106 million bpd. The bank anticipates demand to peak at 110 million bpd in 2034, followed by a plateau until 2040.
The report highlights that extended oil demand growth could enhance revenues for oil producers, such as members of the Organization of the Petroleum Exporting Countries and allies (OPEC+), but also contribute to increased climate-warming emissions from fossil fuels. "We expect peak oil demand to occur by 2034 at 110 million bpd; subsequently, we project a moderate compounded annual growth rate (CAGR) demand decline of 0.3 per cent till 2040," the report stated.
Emerging markets in Asia, particularly China and India, are expected to drive global oil demand growth through 2040. This prolonged growth period could extend the global refining upcycle beyond investor expectations, with utilisation rates remaining above historical averages from 2024 to 2027.
Refining Upcycle and Fuel Trends
Goldman Sachs is more optimistic about middle distillates like diesel and jet fuel compared to gasoline. The report notes that incremental supply growth for middle distillates lags behind demand growth more significantly from 2024 to 2027, partly due to a later demand peak expected for middle distillates (mid-2030s) compared to gasoline (2028).
The cooling of EV sales recently, after years of steady growth, is attributed to consumers waiting for more affordable models. Earlier this month, the International Energy Agency, which anticipates global oil demand will peak before 2030, reduced its forecast for this year by 140,000 bpd to 1.1 million bpd, highlighting a growing discrepancy with OPEC’s projections.
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