Global oil demand will peak after 2030, which will affect the gradual decline in demand for drill bits

Global oil demand will peak after 2030, which will affect the gradual decline in demand for drill bits

Hardy, an executive at commodity trader Vitol Group, recently said, "The slowdown in the pace of energy transformation has pushed the peak of global oil demand to after 2030, and global oil demand still has several years to continue to rise."

Hardy said that as the energy transition progresses more slowly than initially expected, the expected peak in overall demand for oil, gas and coal will also be delayed. Vitol's view of peaking global oil demand is several years behind that of the International Energy Agency (IEA), whiDrill Bitsch advocates accelerating the energy transition.

The International Energy Agency says demand for oil, gas and coal will peak before 2030, undermining the case for increased investment in fossil fuels.

However, Vitol Group said that the energy market has changed in recent months and peak global oil demand will not occur within 2030.

"We agreed with that view a year or two ago, but now believe the pace of change is more challenging," Hardy said. The pace of change has been hampered by rising interest rates, supply chain woes, low returns for renewable energy project developers, and and the challenge of public backlash against governments offering more expensive energy supply options.

The energy transition is happening, but not as quickly as some environmentalists hope. Therefore, global oil and gas consumption will continue to grow, even though the growth rate may have peaked.

As Vitol expects, most analysts and banks also expect global oil demand to peak in the early 2030s. They do not agree with the International Energy Agency's statement that "the end of fossil fuels will begin within 2030."

OPEC has had a vested interest in continued growth in global oil demand for decades and believes that global oil demand is strong in the long term. In 2023, OPEC significantly raised its long-term forecast in the "World Oil Outlook" annual report. It is expected that by 2045, global oil demand will reach about 116 million barrels per day, an increase of 16 million barrels per day compared with its 2022 forecast.

OPEC predicts that global oil demand will increase by more than 16 million barrels per day from 2022 to 2045, from 99.6 million barrels per day in 2022 to 116 million barrels per day in 2045.

OPEC and many other forecasters, analysts and investment banks believe that while China's oil demand growth slows, India will be the top driver of global oil consumption growth.

Analysts said India's strong economic growth in the medium term will boost oil demand, as will continued urbanization and industrialization. OPEC said in its "World Oil Outlook" annual report that by 2045, India will become the main driver of global oil demand growth, with oil demand increasing by 6.6 million barrels per day.

OPEC Secretary-General Haitham Gass published an article on the official website in January, saying, "As India drives oil demand growth, policymakers will readjust the energy transition path, and global oil demand peaks are unlikely to occur within 2030. It is now clear that "What is clear is that peak global oil demand does not occur in any reliable short- to medium-term forecast."

Gass said, "Due to policymakers reassessing the energy transition path and consumers' willingness to resist, peak global oil demand will not occur before 2030. Developing countries are industrializing faster, the middle class is growing, transportation services are expanding, Increased energy demand and access are factors that will prevent global oil demand from peaking in 2030."