Equinor predicts global oil demand peak by 2027-28

Norwegian energy giant Equinor has said it expects global oil demand to peak by 2027-28 – at least two years earlier than the company had previously forecasted, due to the impact of the COVID-19 pandemic on the sector.

“Earlier assumptions for peak oil demand to happen around 2030 may be challenged,” Equinor said in its annual energy outlook. Last year, the company saw demand peaking just before 2030 at 105 million barrels per day (bpd).

Oil demand would then decline to 93 million bpd by 2050 under the same scenario, based on projections of electric cars gradually replacing internal combustion engine vehicles around the world.

However, Equinor’s updated central scenario, dubbed Reform, now predicts demand returning to the pre-pandemic level of around 100 million bpd by around 2025, before falling to 88 million bpd in 2050.

Supply constrains due to underinvestment could also force ‘peak oil’ by 2027-28, the company said. Oil firms have cut investments by around 30% this year after the COVID-19 outbreak precipitated a collapse in demand and prices.

Equinor also pointed to permanent changes to how people work and travel in the post-COVID world, which would further slow oil demand growth. “COVID-19 is likely to lead to slower demand growth for oil products,” it said in the outlook.

“It is likely that demand for aviation fuels will suffer for many years to come, as the pandemic may have permanently altered the frequency with which we fly.”