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.
joe lamonde on Wed, 4th Dec 2024 11:05 pm
Look at him moving his body as if he was own be satan. Listen to him talking, he is mentally sick.
https://www.youtube.com/watch?v=F7z2WrxgZVU
This fucking place called earth.
Matine Lalonde on Wed, 4th Dec 2024 11:25 pm
Another one that is mentally retarded. Listen to him.
https://www.youtube.com/watch?v=3YWIIV19U70
The system should have collapsed along time ago with so many retarded people in charge.
Jeremome lemieux on Wed, 4th Dec 2024 11:34 pm
Look at his body shape.
https://www.youtube.com/watch?v=-gZrHDO4gyc
Ca ne juste plus d’allure.
Amire penle on Wed, 4th Dec 2024 11:52 pm
This will be a big fuck you toward the globalists if the US military is put under the authority of one person or a King.
alaie marie on Wed, 4th Dec 2024 11:58 pm
This will be a big fuck you toward the globalists if the US military is put under the authority of one person or a King. Imagine that the US military will be used to dismantle globalism instead of enforcing globalist as it was supposed. US military will be used to bomb UN NewYork head quater, Isreal, kill AIPAC members,
matime ladie on Thu, 5th Dec 2024 4:37 am
Normally, the US should also retaliate against Europe for pushing of the progressive value and should consider Europe as an enemy. Europe and Israel are no friends of the US. Stop trade retaliation move against Europe seeme the right retaliation move.
narrie lepage on Thu, 5th Dec 2024 5:14 am
A wise man life is based around fuck you. Maybe I have been using this web site as a distraction and it was never my intentions to come the rescue of North America. Maybe you are just entertainment for me.
https://www.youtube.com/watch?v=XamC7-Pt8N0
Alain Delon on Thu, 5th Dec 2024 7:54 am
Don’t worry, I have a strong emotional attachment toward Canada. Dont worry, I will be there to help rebuild Canada. I love Canada oppressive handguns laws and constant humiliation from Canada because I have a penis. Don’t worry I will be there for Canada even if I hate Canada since birth.
Don’t worry, men like will be there to help north america.
maine leplate on Thu, 5th Dec 2024 8:07 am
Don’t worry I love working for free and receiving no salary because I have an high IQ. I love being abuse by people. Can you please abuse me more, I am submissive and want to be abuse and manipulated more.
JOahane pute on Thu, 5th Dec 2024 8:18 am
We will kill everyone on earth and rebuild with a sexual realm. This way we assure ourself of creating a superior race with minimal defect.
https://www.youtube.com/watch?v=–Qudpu7lE8
https://www.youtube.com/watch?v=Yiw3ATjb5EA
katrine lalonde on Thu, 5th Dec 2024 8:32 am
Look there is dying trees on the left of the girl. Look everyone on earth will die because of Canada firearms laws.
https://www.youtube.com/shorts/fvPcnX93N8A
Joseop Bidet on Thu, 5th Dec 2024 8:34 am
Isn’t funny, we have a female procreator in front of dying trees. Do you see.
https://www.youtube.com/shorts/fvPcnX93N8A
Jonny Kash on Thu, 5th Dec 2024 12:05 pm
Who has decided to populate the North. I just watch the snow removal equipment passed in front of my house. I want to know who thought that was a good idea. Nordic population will always consume more natural resources and oil per capita. I told you, they are just fucking losers. You can kill them all.
https://www.youtube.com/watch?v=3-PnCPf3ftg
Karin lporte on Thu, 5th Dec 2024 12:10 pm
Now you understand why it makes sense to kill earth population and repopulate with a sexual realm. This way you can monitor better for an invasion into your population and monitor better the new human specie to see how it evolves over time.
Just fucking loser on this planet. I told you 2 year ago to abolish Canadians firearms laws but you refuse to do so. You can all go fuck yourself.
lavrien paloudred on Thu, 5th Dec 2024 12:34 pm
This is the difference between a car mechanic doing brake repair and fat fuck at UN named Guterres. The car mechanic as a quality standard put on him. It must fixed the braking system and he cannot cheat his way out of it.
The fat fuck of Guterres has a job where there is no quality standards put on him. He does not have to do a good, jobs because he is useless to society unlike the car mechanics. I hate these fucking Intellectual that are just good at talking and never fix anything or achieve anything. You can kill them and the supply chain will still work as it should.
https://www.youtube.com/watch?v=W3rrCWaR0Yo
Kalie Latouffe on Thu, 5th Dec 2024 12:51 pm
Trade people know that there 2 classe on people. The people upon which a severe standard of quality is put upon them such as car mechanics. They know they got a raw deal.
The other class of people where there is no standard of quality put upon them and they can failed as much as them want.
There is a reason why you are losing some part of your supply chain such as car mechanics, welder, aircraft mechanics. There is no way that 2 standards of quality should be tolerated for different type of jobs.
jean lafreniere on Thu, 5th Dec 2024 1:12 pm
If you think having money will protect you during a collapse, you are mentally retarded. When the trade people start abandoning their jobs, there will nobody to fix your car, it won’t matter how much money you have. Same with fix you house, your roof.
jonny laporre on Thu, 5th Dec 2024 2:18 pm
Nobody is coming to save earth and its population. We can repopulate if we need using a sexual realm. We have a complet database of human sexual fantasies. Nobody takes my handgun away from me and brag about it. I promise myself I would kill everyone on earth because of Canada firearms laws. It really matter to me what we kill the whole population of earth.
https://fra.xhamster.com/videos/ballbusting-fun-time-xhkfkvQ
Guliaane latendresse on Thu, 5th Dec 2024 2:58 pm
The population of planet earth is too mentally retarded to be used as procreation seeds to repopulate. Selected male will be rejuvenate and given better sexual organ. Female will be created from scratch as the earth females are useless are procreation seeds and she is too faulty.
It is easier to kill everyone one on earth and restart.
Joelle lavbine on Thu, 5th Dec 2024 3:09 pm
See above. Russia produces a lot of good porn and almost all the sexual fantasies can be found inside Russian porn.
alain Karish on Thu, 5th Dec 2024 3:15 pm
I am a big fan of Russian porn. There is something special about Russian porn that you don’t find anywhere else. They make really good BDSM porn, female pegging, mixed wrestling porn. Their porno is fucking too notch.
Joslpe tleia on Thu, 5th Dec 2024 3:19 pm
You can tell be looking at Russian porn that they have not been infected by the progressive agenda coming out of Europe and Israel.
heline marcelain on Thu, 5th Dec 2024 3:21 pm
It does not matter what Canada do going forward. I am killing everyone on earth and repopulating earth.
Canada to announce new gun control measures | LIVE
https://www.youtube.com/watch?v=z3Mp3Ywze8I
Joe rogan on Thu, 5th Dec 2024 3:52 pm
Canada to announce new gun control measures | LIVE
https://www.youtube.com/watch?v=z3Mp3Ywze8I
It is amazing how Canada is unable to stop humiliating itself.
Aline laprise on Thu, 5th Dec 2024 4:09 pm
This is something I noticed even when I was younger. Canada and Québec politicians are unable to stop humiliating them self and the nation. This is why I have no emotional attachement for Canada and the West. Unable to stop humiliating themself.
joe laterre on Thu, 5th Dec 2024 5:49 pm
Who wrote his speech.
https://www.youtube.com/watch?v=OMX50ZMDpN4
joel fuckup on Thu, 5th Dec 2024 5:51 pm
They are afraid of me.
https://www.youtube.com/watch?v=OMX50ZMDpN4
Janice LeCrosse on Thu, 5th Dec 2024 6:06 pm
Look at how he plays with words. Instead of using multiculturalism, he is now using pluralism. These fucking manipulative cock suckers.
https://www.youtube.com/watch?v=OMX50ZMDpN4
jamale latrie on Thu, 5th Dec 2024 6:17 pm
You are really looking for a full war with a speech like that. Some of you should learn when to shut your mouth closed to not make your position worst as Obama is currently doing.
alain laporete on Thu, 5th Dec 2024 6:54 pm
I know who wrote Obama speech, if you think you will manipulate me like that, you don’t know me. I told you to abolish Canada firearms laws 2 years ago to avoid the situation we are in now. I will fuck you over for what you did to me.
joe lapepine on Thu, 5th Dec 2024 6:57 pm
I will fuck over your whole operation because you failed to abolish Canada firearms laws 2 years ago to avoid the situation we are in now. I will fuck you over for what you did to me.
alaine lagrange on Thu, 5th Dec 2024 7:01 pm
I am waiting for the day where you will come to ask me for help. I am waiting for this fucking day so I can tell you to go fuck yourself.
jean lapierre on Thu, 5th Dec 2024 7:14 pm
One day, you will be forced to come to me for help. I will tell you to go fuck yourself just because you failed to abolish Canadas firearms laws.
joelle lapore on Thu, 5th Dec 2024 7:43 pm
I dare you to come to my house in person and ask me for help. I dare you to do it, to see what kind of answer you will get from me.
janice alaope on Thu, 5th Dec 2024 8:24 pm
I dare you to come to me and ask me for help. I dare you to do it fucking piece of shit.
aline laorest on Thu, 5th Dec 2024 8:44 pm
I will crash to the ground your operation to save earth and force you to restart everything from scratch but without me. I will crash this operation to the ground just because of Canada firearms laws. I don’t mind staying on earth.
marine lagarde on Thu, 5th Dec 2024 8:53 pm
This is an operation that was started to stop earth invasion and leave earth realm. I will crash this operation to the ground and you will be forced to stay on earth indefinitely. All of this because you did not have the courage to abolish Canadian firearms laws.
Alain dpuoot on Sat, 14th Dec 2024 7:38 pm
I really love my life. I bought a beer called Morality made by Dieu du Ciel brewery. When you cannot escape your futures. When your future is already written
https://boutique.dieuduciel.com/products/moralite
Karine laplo0te on Sat, 14th Dec 2024 7:46 pm
Notice how much liars they are. There is a shortage of car mechanics but they refused to interview car mechanics on tv. They prefer to interview loser like Mike Rowe. Really mechanics will tell the truth about how the EPA is sabotaging the car industry with their regulation and it would collapse their control over earth. Notice how the car makers are silent about the news EPA rules. The big corporation are working with the controller of the earth an the EPA to sabotage the car industry.
https://www.youtube.com/watch?v=61-Xm0VgZaI
They refuse to interview real car mechanics but this is what they would tell you.
https://www.youtube.com/watch?v=WohPe05fH64
Joe Montelligo on Sat, 14th Dec 2024 7:52 pm
There is a reason why we have started to kill CEO of big corporations. See comments above
https://www.youtube.com/watch?v=MVoBoPbZYPc
joe laporote on Sat, 14th Dec 2024 8:01 pm
Very soon will be starting to kill CEO of big corporations, politicians, universities CEO, bankers. people working in the media: CNN, FOX News, NBS, MSNBC, ABC, Radio Canada, TVA nouvelles, divorce court judge, feminist prominent figure and so on.
kaline lapierre on Sat, 14th Dec 2024 8:18 pm
The car manufacturers are working with the EPA to kill the car industries including the pick truck segment hat is absolutely needed to maintain cities infrastructure such as water infrastructure, electrical infrastructure.
https://www.youtube.com/watch?v=zRoz7AOhLKs
Look at this, how the car manufacturers are working hard at killing the pickup truck segments.
karine lapierre on Sat, 14th Dec 2024 8:23 pm
I hear it is no better in the agricultural farming equipment where the EPA and manufacturers are working hard at killing the farming tractor. Some people will come for all of you. It will not be me, but some people will come for all of you.
https://www.youtube.com/watch?v=6e7GERZGTk8
Catherine dufut on Sat, 14th Dec 2024 8:59 pm
Trees are still dying around my neighborhood and on YouTube videos. It is coming. The death of everyone on earth is coming except for the chosen ones. Go on YouTube and search for Florida walking tour, California walking tour. You will see that we are in currently killing all the trees of earth. I won’t put any videos links as I am feeling lazy tonight. Go take a walk outside, you will see that I am not lying.
Natlaie rafolf on Sat, 14th Dec 2024 9:36 pm
Let’s talk about protecting the environment. Fucking propaganda coming out from UN and WEF.
https://www.youtube.com/watch?v=iK_qzk6sJS4
I did Winter camping and fall camping in the wood. There is nothing beautiful on earth. Earth is a big shit ball. I was preparing my self for the night, and I had to take some water from a lake. There where rabbit shit everywhere. I had to take water next to rabbit shit and disinfect water by boiling it. I knew when I was dirking this water that I was drinking shit and piss. I was so upset. Earth is really a shit hole. I am fed up with this BS propagande coming from the UN, WEF and others. I say we consume all earth natural resources and them we accept our fate that is the death of the human specie. You will never convince me that earth is beautiful.
Greg rabbit on Sat, 14th Dec 2024 9:44 pm
The only things you will find in the wood in summer is animal shit and mosquitos that are making your life miserable. Nobody will every convince me that earth is beautiful and worth saving. Never.
https://www.youtube.com/watch?v=JdWQJq2OkJs
You will never convince me that earth is worth saving. You will never convince me that human life is a miracle that is worth saving. I say, fuck you and fuck earth.
Jerole tetrault on Sat, 14th Dec 2024 9:56 pm
You will never convince me that the human specie is worth saving. The human body is a garbage vehicle. It smell, required too much maintenance such as showers, cutting nails, shaving your face and body hairs shaving. The human body is weak physical and cannot lift heavy weight. It ages too fast. Eyes sight is really limited. The human body is a piece of crap and I am sure that I am not the only one thinking that. The mental abilities of the human mind is really limited. It lack long term memory, it lack the advanced mental computational abilities, it lack to abilities to store and visualized 3D images. It is a fucking piece of crap. I say, we terminate the human specie experiment and move to something else.
Jaeanine Laporte on Sat, 14th Dec 2024 10:02 pm
Earth is an execution chamber that we created to kill undesirable beings. Earth is a matrix of solid only modifiable by heat (oil) and hold together by the forces of gravity and frictions. We made earth because we hate its population not because we love you. The earth mathematical calculators are locked and you cannot accessed them or modified them. You are fucked.
jean lapointe on Sat, 14th Dec 2024 10:10 pm
Earth is a matrix of solid hold together by gravites forces and frictions forces. A bolt is holding two parts together because of the frictions forces between the bolt and the screw. There is nothing special about earth that is worth saving.
Notice in the table the line called: Friction coefficient of thread
https://www.engineersedge.com/calculators/bolt_torque_from_thread_pitch_calculator_15830.htm
karine laporte on Sat, 14th Dec 2024 10:17 pm
We are the ones that control earth, not all of you stupid elites