It is fairly common nowadays to see relatively near-term estimates for a point at which demand for petroleum-based fuels begins to decline. The term often used to describe this “tipping point” is Peak Oil Demand. When I say “near term,” I mean right around the corner if you look at an estimate published last year by the International Energy Agency-IEA, an intergovernmental agency headquartered in Paris, France, and originally established after the Oil Embargo of 1973 to help cushion against future oil shocks. This agency has expanded its mission to a fairly broad remit over the years since, and it is not the purpose of this article to detail all its endeavors. One role we will highlight is that of the one it plays in gauging and advising member governments on energy security and energy sources for the coming years.
In that capacity, the IEA in a report entitled, Oil 2023, and published last year settled on 2028 as the year past which the use of petroleum fuels will begin to decline.
“Growth in the world’s demand for oil is set to slow almost to a halt in the coming years, with the high prices and security of supply concerns highlighted by the global energy crisis hastening the shift towards cleaner energy technologies, according to a new IEA report released today.”
This view is largely shared, particularly with respect to liquid motor fuels, by other agencies and organizations that produce long range estimates. The U.S. Energy Information Agency-EIA, Rystad, and Det Norske Veritas- DNV, all show this category tailing off rapidly in the 2030s as electric vehicles assume larger shares of passenger vehicles. We will call this the “Bear Case” for liquid fuels.
As you might expect the Organization of Petroleum Exporting Countries-OPEC, disagrees with this view. In fact in their recent report on oil demand outlook, published in Nov 2023, they see oil demand of all kinds, except for electricity generation, rising from ~105 mm BOPD in 2025, to 116 mm BOPD in 2045. This forecast show use of oil as a road fuel continuing to be the largest source of demand increase for this period.
The report notes that “the divergence between the IEA and OPEC outlooks is largely due to assumptions regarding the speed at which internal combustion engine vehicles will be replaced by electric vehicles.”
What is interesting is that it is very difficult, if not impossible, to see a production trend being established that would support the bear case. In the U.S., we are pumping at a rate of over 13.2 mm BOPD and still importing ~6.7 mm BOPD to feed our nearly 22 mm BOPD daily habit. The U.S. Energy Information Agency-EIA forecasts in their monthly Short-Term Energy Outlook-STEO that by the end of 2025, global production and demand fall into a fairly tight balance at 105 mm BOPD. That certainly isn’t a long-term trend, but as is often said, the long-term trend is made up of a bunch of short-term ones. For my part, I would say that the trend line in the STEO graph below matches the OPEC estimate more closely than the other three.
Both of these notions cannot be true. Which is the correct assumption about future oil demand? Or are they both wrong? What are two factors these two disparate views of oil demand are not taking into account?
The first answer lies in how you interpret the growth of the middle class in China, India, and Africa in terms of energy demand and the final form it will take. The second is the advent of energy demand for Artificial Intelligence (AI), an entirely new source of demand that is just now starting to appear in energy demand forecasts. I discussed one possible outcome of this demand for U.S. natural gas in an article in March 2024.
To be clear, I am not arguing that AI demand will directly impact crude oil demand as a primary source. Most analysts are factoring renewables and natural gas to meet AI demand. What will impact demand for WTI and other baskets of crude is the relationship to light oil production in the U.S. and the associated gas that’s produced along with it. We will leave that discussion for a future article and refocus on our basic topic. What could oil demand actually be when accounting for growth in currently underserved but upwardly aspiring lower classes?
Then there is the Bull Case for oil. Arjun Murti, a well-known energy commentator and partner at energy analyst firm Veriten, as well as a former Goldman Sachs energy analyst, discussed future energy demand in a recent podcast on his Super-Spiked blog. In the episode titled, “Everyone is Rich,” Arjun posits what the impact on world energy demand would be if everyone was as energy-rich as the “Lucky,” 1.2 billion people that live in the Western World. More specifically, Arjun asks what it would mean for the other 7 billion people in China, India, Asia, and Africa to have the lifestyle that Americans, Canadians, Europeans, and a few other countries enjoy. The answer he comes up with on an absolute basis, 250 mm BOPD, using a reference point of 10 bbls a year!
Where are we now? The U.S consumes ~22 bbls of oil annually per capita while China consumes 3.7 bbls per capita. Indians use just 1.3 bbls per annum. That’s a pretty wide gap, and as Arjun notes, “economic growth and energy growth are one and the same. You do not get economic growth without adequate energy.”
One of the arguments put forward by the Peak Oil crowd is that efficiency growth Gross Domestic Product (GDP), and energy substitution will bend the curve on oil demand, as noted in the 2030’s, and spell the twilight of fossil fuels. Arjun points out that there is simply no evidence this is happening using data compiled by Goldman Sachs through 2019. Efficiency gains never lower the amount of energy needed to produce an additional dollar of GDP, above 2.7% GDP growth. A point rarely hit in modern times. To close that gap and attain growth you need more energy inputs. Oil.
Looking at Arjun’s graph below, which uses China as an example, we can see with their present demand of 3.7 bbls per capita which equates to about 15 mm BOPD. With 10 bbl per annum added on for growth in the middle class, you get to 35 mm BOPD to meet Chinese energy demand. Even if China attains 100% Electric Vehicle-EV penetration, not something Arjun (or I) believe is possible, you still have 27 mm BOPD of oil demand. According to SP Global China produces about 4.1 mm BOPD, leaving a gap of about 11 mm BOPD they must import to meet present-day demand.
A point that leads me to what Arjun noted as the ultimate demand limiter and why, although countries that will surely desire to increase their oil usage may not be able to do so. Geopolitical limits to imports. Quoting Arjun, “There is no precedent for countries importing 20-30 mm BOPD” to meet their energy needs. The U.S., before the advent of shale production was importing over 10 mm BOPD as recently as 2005. That’s what we know is possible.
It should be noted that India is in a similar fix and for it to meet Arjun’s 10 bbl per capita standard for being rich, they must import 35-45 mm BOPD. We just don’t know if this can be done from both a logistical and sheer capacity of supply basis. As the EIA graph above highlights global oil production has increased only about 3 mm BOPD since 2019. In order for the world’s poor to become richer, a great deal more oil will have to come to market.
Your takeaway
The message of the growth of the middle class globally often gets lost in the constant blare of climate change and energy transition noise. The fact remains that the world we live in today and the one likely to exist at mid-century, runs on oil.
The notion that the world can quickly and painlessly transition to other forms of energy has developed some, not holes, but gaping craters in recent times. Offshore wind farms are being canceled as costs mount. Car manufacturers are delaying implementation of EV rollouts due to lack of interest from consumers. Communities impacted by siting of solar farms are pushing back on land use as they propose to gobble up large tracts for this purpose.
Roger Pielke, another well-known energy commentator and author, in a post in his Substack, The Honest Broker, cites a White Paper by Vaclav Smil that discusses our energy transition progress to this point-
“All we have managed to do halfway through the intended grand global energy transition is a small relative decline in the share of fossil fuel in the world’s primary energy consumption—from nearly 86 percent in 1997 to about 82 percent in 2022. But this marginal relative retreat has been accompanied by a massive absolute increase in fossil fuel combustion: in 2022 the world consumed nearly 55 percent more energy locked in fossil carbon than it did in 1997.”
Balanced against this lack of progress in substituting oil for other forms of energy is the fact that the world’s energy supply is in a tight balance with demand at present. If the poor of the world make even modest progress toward Arjun’s 10 bbl per annum prognostication in the coming years, the Bull Case for oil will certainly asset itself.
ee on Tue, 10th Sep 2024 5:38 pm
Everything looks fake in Miami. The people look fake and dead inside, even, the building look fake.
https://www.youtube.com/watch?v=nqwwdD80a-Y
Compare this with Pattaya. The city look real including the people.
https://www.youtube.com/watch?v=1tuCeoTmc_0
ee on Tue, 10th Sep 2024 5:51 pm
this is the kind of ugly women we have to look at in the west. See 0:41. The only real advantage that Québec had over the rest of the world was cheap electricity. Now they will start increasing the price of electricity. What is the point of staying in Québec where you have to heat your house 6 month in the whole year.
https://www.youtube.com/watch?v=XM0MgcDKego
ee on Tue, 10th Sep 2024 5:57 pm
One of these day, they will pull the plug and planet earth and kill everyone except the chosen ones.
ee on Tue, 10th Sep 2024 6:04 pm
As the young White female is getting older her ugliness increases exponentially. See 0:41 for a typical ugly White female.
https://www.youtube.com/watch?v=XM0MgcDKego
ee on Tue, 10th Sep 2024 6:29 pm
43:45 look at you fucking dying trees. Smart cities with green vegetation, it is not going to happen.
https://www.youtube.com/watch?v=xqy0LW0QENA
ee on Tue, 10th Sep 2024 6:32 pm
Look at your green vegetation dying right in from of your face at 51:19.
https://www.youtube.com/watch?v=xqy0LW0QENA
Aee on Tue, 10th Sep 2024 6:45 pm
Look at this fucking loser on the left. He is having trouble controlling the muscle of his face. It is because of the installing of a new energy field on earth. They did not receive the appropriate updates needed to work with the new energy field. His facial expressions are not natural. From 0:00 to 0:23. He is unable to keep his head straight up.
https://www.youtube.com/watch?v=VZC1fOW4fGs
ee on Tue, 10th Sep 2024 6:56 pm
This is what I mean by Canada and the US are ugly places. Look at 4:35
https://www.youtube.com/watch?v=lqWe6XnSmrQ
and compare this to pattaya.
https://www.youtube.com/watch?v=aK9FL6Ikz8c
ee on Tue, 10th Sep 2024 7:25 pm
43:38 dying trees with yellow leaves. I told you that I would kill everyone on planet earth because of Canada firearms laws. I told you that this was a red line not to cross for me.
https://www.youtube.com/watch?v=zyw5dVouBx4
eedd on Tue, 10th Sep 2024 7:29 pm
Compare Nice
https://www.youtube.com/watch?v=zyw5dVouBx4
against pattaya
https://www.youtube.com/watch?v=aK9FL6Ikz8c
Pattaya look like a real city with real people. I told the the West is ugly and boring no matter where you look
ee on Tue, 10th Sep 2024 7:53 pm
Women are so full of shit. This is why I hate them so much, and I consider them only good as sex toy to help with low testorere problems.
https://www.youtube.com/watch?v=X0g7xhwgL7s
The only think women care about are their own personal safety and controlling everything around them using shaming and cheap psychological manipulate methods. From my point of view, it is ok to kill and rape women. From my point of view, women have no real value outside temporary testosterones boost. Women have no concept of morality and it is ok to treat them like shit. This is also valid for feminized men.
ee on Tue, 10th Sep 2024 8:30 pm
The food is uneatable now.
ee on Tue, 10th Sep 2024 11:21 pm
I am not a voluntary participant in all of this. But if I get the power to kill everyone on planet earth I will do it just because of Canada firearms laws.
ee on Tue, 10th Sep 2024 11:27 pm
I hate the population of earth, and I want everyone dead. I even have plans in case I am forced to become a make procreator. I have ideas about completely redesigning the actual female. The actual female is just plain fucking garbage and I want all of them dead.
ee on Tue, 10th Sep 2024 11:32 pm
In a year from now, just by looking at the state of earth green vegetation. you will know if earth reality has a future or not.
ee on Tue, 10th Sep 2024 11:32 pm
I want the women of all earth dead. They are fucking worthless.
ee on Tue, 10th Sep 2024 11:34 pm
In a year from now, just by looking at the green vegetation you will know.
ee on Tue, 10th Sep 2024 11:48 pm
According to CNN Haris won the debate. this mean she will be installed as president of the US. It means we will crash the financial system during her presidency and have the enrage crowd kill her, her husband and children. I have spoken about this in previous comment. They only issue that could stop this is the speed at which earth green vegetation is dying.
https://www.youtube.com/watch?v=waqJyvLN1SI
eedd on Tue, 10th Sep 2024 11:50 pm
‘Donald Trump got destroyed’: See Maddow and MSNBC panel instantly react to historic debate
https://www.youtube.com/watch?v=SpRtNilzLSc
ee on Tue, 10th Sep 2024 11:53 pm
Kamala Harris used ‘airtime’ to her advantage: Kosha Gada
https://www.youtube.com/watch?v=GbLUnhnKclg
Notice the word advantage. See my comments above.
ee on Tue, 10th Sep 2024 11:59 pm
A month before 9/11, The company I worked at install a television next to elevator. They knew I was not watching TV at home. They wanted me to see this. We control everything here on earth. We are going to ass fuck the population of earth like you have no idea.
https://www.youtube.com/watch?v=2o3QPVY8BVk
ee on Wed, 11th Sep 2024 12:09 am
I am the representative of GOD in a flesh body. I am here on earth to carry retaliation against the population of earth on his behalf,
ee on Wed, 11th Sep 2024 12:53 am
If you fix your own car you will understand why I put this video here. Look at how much plastic there is in the engine bay and inside the cab of the truck. This is a sign of advance natural ressource depletion. You don’t have the energy to make aluminium cast engin part anymore. They even done have real iron cylinder steel anymore. They have some kind of plasma process. See 10:05.
The law of conservation of mass is real.
https://www.youtube.com/watch?v=YFrN9sBKlVA
ee on Wed, 11th Sep 2024 1:04 am
At 18:14 she is doing on purpose to show you dead through the back window with her finger.
Some of you have just no idea how this world works.
https://www.youtube.com/watch?v=YFrN9sBKlVA
ee on Wed, 11th Sep 2024 1:05 am
At 18:14 she is doing on purpose to show you dead trees through the back window with her finger. Some of you have just no idea how this world works.
https://www.youtube.com/watch?v=YFrN9sBKlVA
ee on Wed, 11th Sep 2024 1:08 am
18:49 we are showing you dead trees again.
https://www.youtube.com/watch?v=YFrN9sBKlVA
ee on Wed, 11th Sep 2024 1:17 am
Are you still proud of your Canadian firearms laws.
ee on Wed, 11th Sep 2024 2:39 am
Le Mexique, USA and Canada are destroying themself voluntarily to make it easier the installation of King that will rule over North America. Now they just have to collapse the government of these 3 nations including the central bank and use the big banks as a temporary replacement for the central bank .
https://www.youtube.com/watch?v=peIGN6vnNHk
ee on Wed, 11th Sep 2024 2:46 am
Next Mexico prime minister will be a Jewish woman that will also be executed at the appropriate time. The Jews will have to leave North America.
ee on Wed, 11th Sep 2024 2:49 am
UN is on its last legs. Once the US collapses, all the money going toward the UN will be cut to zero.
ee on Wed, 11th Sep 2024 9:01 am
9/11 was a message sent to earth, to tell the population of earth that we will kill everyone living on earth.
ee on Wed, 11th Sep 2024 9:06 am
I will repeat that. A month before 9/11, The company I worked at install a television next to elevator. They knew I was not watching TV at home. They wanted me to see this. We control everything here on earth. We are going to ass fuck the population of earth like you have no idea.
9/11 was a message sent to earth, to tell the population of earth that we will kill everyone living on earth.
ee on Wed, 11th Sep 2024 9:14 am
Will the FED will cut rate. IF it does you know what is coming and who will be elected and why.
Core Inflation Comes In Hotter Than Expected As Shelter Costs Unexpectedly Rise
https://www.zerohedge.com/economics/core-inflation-comes-hotter-expected-collapsing-odds-50bps-rate-cut
ee on Wed, 11th Sep 2024 9:19 am
Nobody die at 9/11. The population of the West is already dead inside. Look at your fucking neck. You don’t have a real flesh body. You are already dead.
ee on Wed, 11th Sep 2024 9:24 am
I like how stupid the government of Québec is. Québec has nothing to offer compare to other nations of the world. It is a cold place, with ugly and boring people. Québec decided to increate the price of electricity, the only thing that was making Québec somehow attractive. Fuck I hate these stupid useless pieces of shit working for the government of Québec and Canada.
ee on Wed, 11th Sep 2024 9:27 am
Look at this piece of shit. He is talking with his eyes closed. What a fucking loser.
https://www.youtube.com/watch?v=oRdFrEU_xWQ
ee on Wed, 11th Sep 2024 9:47 am
I could go live in Brazil have warm weather all around and nice beaches.
https://www.youtube.com/watch?v=T_MikD80ly0
What does Québec has to offer to me. Feminist women that are ugly and always look angry. Long Winter that are expensive because of clothing, electricity, snow removal fee and so on. The only thing Québec has going for itself was cheap electricity to compensate for a the fact that we live in ugly nation, with ugly women. Imagine that, Québec is making itself even less attractive as a nation as it raises electricity prices. Fucking stupid pieces of shit.
ee on Wed, 11th Sep 2024 10:00 am
Look at the nose of this fucking negro. You could fly an aircraft through one of his nostril. Can he see himself in a mirror.
https://www.youtube.com/watch?v=IKOuDOqFIeU
ee on Wed, 11th Sep 2024 10:03 am
I want to know what Québec has to offer me compare to Brazil or Thailand. Try to convince me that Canada and the US is better the Brazil or Thailand
ee on Wed, 11th Sep 2024 10:06 am
Brazil has hydro-electricity also. Tell me what the US and Canada have to offer me compare to Brazil or Thailand. I am waiting for your fucking answers.
ee on Wed, 11th Sep 2024 10:17 am
this is what Canada has to offer to its population: full working slavery with nothing in return.
Canada has always to remind its population that it exists only to be used as hard manual slave labor for the rich and globalist.
Fuck I hate the US and Canada.
https://www.youtube.com/watch?v=9S3rVU8FE7c
What do you have to offer me other the working like a dog for a shit salary with no rights.
ee on Wed, 11th Sep 2024 10:26 am
I want to know what Québec has to offer me. Can I grab the vagina of a women without being called a rapist and go in prison for sexual harassment. I sure can do that in Thailand and nobody will care. Tell me what the Canada and US have to offer me.
ww on Wed, 11th Sep 2024 10:30 am
You could at least change gun laws to accommodate me. You are too coward to do anything to please right wing men like me. You want me like to leave the nation so you can have your communist utopia for you alone.
ee on Wed, 11th Sep 2024 10:38 am
Offer me something, US and Canada. Offer me something to make me stay here in these shit holes.
dd on Wed, 11th Sep 2024 10:45 am
Brazil has hydro-electricity, nice beaches, no snow at all, nice bitches to fuck. What Canada, Québec and the US have to offer me. Nothing to offer me. You are just fucking losers and the rest world can see the West for what it is. A totalitarian shit hole where you work hard until the day you die.
ee on Wed, 11th Sep 2024 10:49 am
What do you have to offer me over Thailand and Brazil. I am waiting fucking losers.
ee on Wed, 11th Sep 2024 10:51 am
Now you know that if I can I will abandon Québec, Canada and the US and I will not be feeling guilty about it.
ee on Wed, 11th Sep 2024 10:55 am
I told you Canada was a fucking loser nation. Normally under intelligent leadership, you would have changed the firearms laws to please right wing men. They prefer to die while holding power then letting go of power to save the nations. Nothing is more selfish than a woman and a feminized beta cuck boy.
ee on Wed, 11th Sep 2024 11:13 am
if they really want, they can transform Brazil and Thailand into civilizational knowledge lifeboat within a year. Everything is digitalized, education records and employment history.
Really easy to identified talented people: heavy diesel mechanics, engineers, mathematicians, industrial mechanics.
I want to know what Québec, Canada and US has to offer to talented people that Thailand and Brazil cannot offer.
ee on Wed, 11th Sep 2024 11:23 am
Communist, women and beta cuck feminized men prefer to hang on to power even if it will cost them their life, then letting go of power and save their life.
They are basically heavly mentally retarded.