Global oil demand is set to rise through 2030 amid weaker-than-expected efficiency gains, BP said on Thursday in its 2025 Energy Outlook, in which the supermajor ditches its forecast from last year that oil demand could peak as soon as this year.
In the new outlook, the UK-based oil and gas major says that under the Current Trajectory scenario, one of two scenarios reviewed, oil consumption will continue to grow over the rest of this decade, albeit at a declining rate, before edging back to around its current level by 2035.
Demand growth will be supported by increasing use in India and other emerging Asian countries as their economies continue to grow rapidly, partially offset by continuing declines in developed markets.
“In marked contrast to the past decade during which China accounted for around half of all global oil demand growth, China’s oil consumption is slightly lower by 2035 in Current Trajectory,” said BP, which earlier this year shifted its focus back to its core business of producing oil and gas and scaled back significantly investment in renewable energy and biofuels projects.
Spencer Dale, BP’s chief economist, said in the foreword to the outlook, “I realize that shifting patterns in energy efficiency may seem a little arcane, but I would argue that the sustained weakness in efficiency gains over the past five years was one of the most important factors shaping global energy over this period.”
This sustained efficiency weakness has “underpinned the continued steady growth in fossil fuels despite the rapid growth in low carbon energy, led by solar and wind,” Dale said.
In a major reset back to oil and gas, BP in February said it would increase its investment in upstream oil and gas to $10 billion per year while slashing spending on clean energy by more than $5 billion a year.
In the upstream, BP will aim for 10 new major projects to start up by the end of 2027, and a further 8–10 projects by the end of 2030. Production is also expected to grow to 2.3–2.5 million barrels of oil equivalent per day (boed) in 2030, with capacity to increase to 2035.
The supermajor’s latest energy outlook matches its most recent strategy reset to bet on oil and gas again.
By Charles Kennedy for Oilprice.com
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