According to a new report, oil demand could peak and then decline by 2030.
Energy portal Oilprice.com, citing Bank of America Merrill Lynch (BoA), said oil demand should continue to grow for the next decade or so, albeit at a slower and slower rate.
“According to BoA, the annual increase in global oil consumption slows dramatically in the years ahead.
“By 2024, demand growth halves, falling to just 0.6 million barrels per day (mb/d), down from 1.2 mb/d this year,” it said in a report Feb 5.
But demand growth zeros out by 2030, as consumption reaches a permanent peak, before falling at a relatively rapid rate afterwards, he said.
Oilprice said the proliferation of electric vehicles is the main driver of the destruction in demand.
BoA did offer a few caveats and uncertainties.
The growth of EVs hinges on a handful of key metals. Lithium, for instance, is mined and produced in large concentrations in a few Latin American countries.
However, cobalt looms as a larger concern for some automakers.
Roughly 62 percent global cobalt output is found in the Democratic Republic of Congo.
Oilprice reported that a Ford executive recently said car manufacturers may feel compelled to invest directly in the production of cobalt over fears of adequate supply. -THE EDGE MARKETS