Oil demand to plateau in 2030s if major consuming nations ban petrol cars

Two major global oil consultancy firms have begun to map out scenarios for if China and India move to ban petrol and diesel cars and accelerate their respective electric vehicle (EV) industries.

The two countries comprise of over a third of the world’s population and have long been viewed as the main drivers of oil consumption owing to their fast-developing economies.

However, earlier this year India indicated that it wanted all cars to be electric by 2030, while Chinese officials also recently suggested the Asian powerhouse could follow the UK and France in pledging to ban all diesel and petrol cars by 2040.

PIRA Energy, a unit of S&P Global, outlined that oil demand would be 10.8 million barrels a day lower in 2040 if petrol vehicle bans came into place over the coming decades in China and India.

Mark Schwartz, head of PIRA’s scenario planning group, said: “In a scenario where EVs approach 40% of the on-road vehicles in the world by 2040, compared to our reference case of 20%, global oil demand would essentially plateau in the early 2030s.”

Wood Mackenzie also said that recent comments by Chinese officials reinforce the government’s aim to promote EV growth. China is already targeting 20% of new car sales to be electric by 2025.

Meanwhile, Royal Dutch Shell is preparing for the eventual full-scale transition to EVs with the imminent opening of the UK’s first ‘no-petrol’ station, an EV charging and hydrogen cell refuelling centre.