The increasing popularity of electric cars over the next 20 years will not significantly affect oil demand worldwide, according to the International Energy Agency (IEA).
This means that storage tank fabrication and other ancillary services will continue to be relevant, even as there would be 50 million and 300 million electric vehicles by 2025 and by 2040, respectively. The IEA estimated that there are currently around 2 million electric cars.
Impact on Demand
Despite the surge in electric vehicles, demand for oil will only decline by 2.5 million barrels per day (bpd). This will represent around 2% of the total global demand by the forecast period. The IEA released the data from its World Energy Outlook 2018, which also contained revised estimates on future oil prices.
It lowered its long-term forecast from 2016 after it took into the account the declining cost of renewable and non-renewable energy sources, more environmental campaigns and a booming U.S. shale oil and has production. By the mid-2020s, the agency expects global oil prices to increase up to $83 per barrel based on current environmental laws and planned regulations.
The U.S. oil industry may also set an unprecedented record on output, as it would increase supply by 8 million bpd between 2010 and 2025. This will represent the strongest record in the history of oil production, according to the IEA outlook.
The influx of more electric cars may have affected the passenger vehicle and power generation industries, although it has yet to manifest any impact on the transportation and petrochemicals segments, according to Laura Cozzi, head of IEA’s Energy Demand Outlook division.
The global oil industry has already faced tougher competition from the emergence of renewable sources of energy, but the IEA’s outlook shows some optimism that the sector would continue to withstand the new challenge brought by electric cars.