Oil demand is estimated to keep increasing until 2035 at the slowest pace, as Asian economies begin their shift from a hydrocarbon-based economy to one fueled by electric power, stated Wood Mackenzie. Chairman Flowers stated that in 20 years, global demand for oil would peak out. His company predicts this point to be around 2035–36. The IEA, which is responsible for monitoring energy supplies of the world’s wealthy countries have stated that there is no indication about demand peaking up in the next few years. This peak is among the biggest questions currently being investigated in the global energy industry. An accurate estimation could determine how trillions of dollar worth of investment choices is made. They can also help estimate greenhouse gas emission trajectory.
Flowers also stated that current demand increase in the EU is quite low and that American demand would taper off too. Most of the current demand for oil comes from Asian countries. Singapore, South Korea, Japan, India, and China are the biggest importers of oil in the Asian continent. Demand increased by around 2.5% during 2018 to reach 25.9 million barrels/day. India and China account for a majority of the current spurt. However, Flowers stated that as EV industry takes off, this demand would fall as well.
Once the world shifts to electric vehicles, China is likely to benefit well. It has the world’s largest automobile market. It also has the necessary manufacturing capabilities along with access to key battery materials needed for the EV industry, like lithium. China has poured quite a lot of investment in the EV industry. Hybrid and electric car buyers were offered lavish subsidies for quite a few years. These subsidies are now being withdrawn slowly, with manufacturers having to pick up the tab now. New rules now mandate that 10% of companies’ sales be of plug-in based hybrids or all-electric based battery vehicles. These rules will apply to all car makers that import or produce over 30,000 vehicles annually. The requirement will increase to around 12% by 2020.