‘Peak oil’ reached last year, predicts BP as green energy transition accelerates

BP has declared that global oil demand may never exceed the level reached in 2019, following the impact of the COVID-19 pandemic this year and an acceleration in the green energy transition.

In its annual Energy Outlook report, BP said that ‘peak oil’ may have been reached last year and that demand may begin falling in absolute terms for the first time in modern history.

The British oil major sees oil being replaced by clean electricity from wind and solar farms and hydropower plants as renewable energy emerges as the fastest growing energy source on record.

Two of the three 30-year energy scenarios included in the report found that oil demand had reached a peak in 2019, while the third – showing a world in which climate action does not accelerate – saw demand plateauing in the 2020s and declining from 2035.

BP CEO Bernard Looney said the Energy Outlook will help deliver its new green strategy and its net zero emissions ambition by 2050. However, he stressed that the world remains ‘on an unsustainable path’.

“The scenarios show that achieving a rapid and ‎sustained fall in carbon emissions is likely to require a series of policy measures, led by a ‎significant increase in carbon prices,” he said.

“These policies may need to be further reinforced by shifts ‎in societal behaviours and preferences. Delaying these policies measures and societal shifts ‎may significantly increase the scale of the challenge and lead to significant additional ‎economic costs and disruption.”