Yeah, it's interesting how the talk now about oil peak is all about a flat peak or plateau. Air travel and petrochem growth is not really the driver of the peak. Rather ICE displacement by batteries is. The timing and sharpness of the peak depends on how fast EV and batteries grow. If you think that EVs will take another 4 or 5 years to double, then you get a flat peak that is 4 or 5 years out. But if EVs double in the next 2 years, then the peak comes much sooner, perhaps even 2023 and the plateau is very short.
So most of these "conservative" forecasters will have to move their peaks up sooner every year that their EV uptake forecast underpredicts.
Roughly speaking 14M new EVs in 2023 will put about 0.5 mbpd of downward pressure on oil demand. This is resisted by about 0.5 mbpd of upward pressure from petrochem and jet fuel demand growth. So looking forward to 2024 it is hard to tell which way this will net out, i.e., plateau. But suppose EVs double in two years, 2025. Thus the downward pressure of EVs is about 1.0 mbpd against about 0.5 mbpd of upward pressure. Thus the net downward pressure is about 0.5 mbpd. This is still slight enough that other transitory noise could goof up the peak, but most likely the decline will be near 0.5 mbpd. Look out 3 more years to 2027 EV push down 2.0 mbpd totally overwhelming the 0.5 mbpd other growth. A 1.5 mbpd net decline will be unmistakable and painful for the oil industry.
Thus, we are just 2 more doublings of EVs away from a real crisis in the oil industry. It matters an awful lot whether it takes another 8-10 years to get two more doublings or whether that happens within the next 4 years. The oil industry is desperately hoping EV uptake will slow down.
So most of these "conservative" forecasters will have to move their peaks up sooner every year that their EV uptake forecast underpredicts.
Roughly speaking 14M new EVs in 2023 will put about 0.5 mbpd of downward pressure on oil demand. This is resisted by about 0.5 mbpd of upward pressure from petrochem and jet fuel demand growth. So looking forward to 2024 it is hard to tell which way this will net out, i.e., plateau. But suppose EVs double in two years, 2025. Thus the downward pressure of EVs is about 1.0 mbpd against about 0.5 mbpd of upward pressure. Thus the net downward pressure is about 0.5 mbpd. This is still slight enough that other transitory noise could goof up the peak, but most likely the decline will be near 0.5 mbpd. Look out 3 more years to 2027 EV push down 2.0 mbpd totally overwhelming the 0.5 mbpd other growth. A 1.5 mbpd net decline will be unmistakable and painful for the oil industry.
Thus, we are just 2 more doublings of EVs away from a real crisis in the oil industry. It matters an awful lot whether it takes another 8-10 years to get two more doublings or whether that happens within the next 4 years. The oil industry is desperately hoping EV uptake will slow down.