The Organization of the Petroleum Exporting Countries, Opec, and big oil companies around the world are looking at the growing popularity of electric cars anew, and revising their forecasts, according to a new report by Bloomberg New Energy Finance.
The prospect of a massive trend that shows consumers turning away from petrol-driven vehicles would have huge implications for the oil industry.
Petrol-driven vehicles account for almost half of oil production demand, according to the US Department of Energy, while other sources say it’s more than 50 per cent.
Either way, that makes road vehicles the single largest consumer of oil in the world, and a seriously important market for big oil producers.
And while in the past automakers may not have considered a switch to electric in a big way, now the consumers seem to be buying what are being called new energy vehicles in large numbers, especially in China, the largest car market in the world overall.
Colin McKerracher, head of advanced-transport analysis at BNEF in London, wrote in a note to clients in which he said: “The number of EVs on the road will have major implications for automakers, oil companies, electric utilities and others.
“There is significant disagreement on how fast adoption will be, and views are changing quickly.”
However, other analysts say that the growing demand for electric will have little or no effect on the oil industry.
An article on OilPrice.com noted that BP, one of the world’s largest oil producers, forecast that even if 100 million electric cars were on the road by 2035, it will over reduce global oil demand by 1.2 million barrels – a tiny fraction of total global output.
But another article on the same website also reported that new, more efficient and powerful battery technology may change the forecasts, possibly bringing electric vehicle numbers to 15 to 30 per cent of global new vehicle sales, according to a senior economist at Total, another oil giant.