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BP projects peak oil is close or already happened

14 September 2020

BP released the 2020 edition of its Energy Outlook, which projects that peak oil may be very close, or already happened in 2019.

The Energy Outlook 2020 considers three main scenarios which explore different pathways for the global energy system to 2050:

The global demand for liquid fuels, Figure 1, in Rapid and Net Zero never fully recovers from the fall caused by ‎Covid-19, implying that oil demand peaked in 2019 in both scenarios. ‎The consumption of liquid fuels falls significantly in both scenarios, declining to ‎less than 55 Mb/d and around 30 Mb/d in Rapid and Net Zero respectively by 2050. The falling ‎demand is concentrated in the developed world and China, with consumption in India, other ‎Asia and Africa broadly flat as a whole in Rapid, but falling below 2018 levels ‎from the mid-2030s onwards in Net Zero.

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Figure 1. Liquid fuels consumption and supply growth

(Source: BP Energy Outlook)

In contrast, after recovering from the impact of Covid-19, the consumption of liquid fuels in BAU ‎is broadly flat at around 100 Mb/d for the next 20 years, before edging lower to around 95 Mb/d ‎by 2050. Demand for liquid fuels continues to grow in India, other Asia and Africa, offset by the ‎trend decline in consumption in developed economies.‎

The decline in oil consumption is driven by a combination of factors, including increasing efficiency and electrification of road transportation, and slowing global economic growth.

Some of the other key projections of the Outlook are:

The projected oil demand and energy consumption figures are significantly smaller compared to the predictions in the 2019 edition of the Outlook. These reduced projections suggest that analysts believe the Covid-19 pandemic will have a long-lasting, if not permanent, impact on the world economy and energy markets.

According to the Outlook, the disruptions associated with Covid-19, together with the increase in trade disputes and sanctions in recent years, may also lead to a process of deglobalization, as countries seek to increase their resilience by becoming less dependent on imported goods and services, and companies reshore certain activities and move supply chains closer to home. One manifestation of these trends is that concerns about energy security will likely increase, particularly in countries which are highly dependent on energy imports.

Source: BP Energy Outlook