TotalEnergies delays peak oil demand forecast by a decade

TotalEnergies has nudged back its peak oil demand forecast by a decade as global consumption has continued to climb and affordability concerns have dogged decarbonization plans, it said Nov. 4.

In its annual World Energy Outlook, the French energy major projected that global demand for petroleum products will plateau by 2040, pushing back its previous 2030 forecast for the world to reach peak consumption.

Between 2024 and 2030, the company sees oil products demand rising from 103 million b/d to 107 million b/d, before rising again to 108 million b/d in 2040 and subsequently beginning a slow descent.

As the primary driver of global demand growth, India will account for a growing share of total consumption, offsetting declines in Europe, China and other countries. By 2050, India could account for 10% of global oil demand, up from 5% in 2024, as Europe's share recedes from 15% to 7%, according to the report.

It linked lasting growth to a global "energy addition" phase spurred by rising uptake in China and emerging countries, which saw world consumption of every major energy source hit record highs in 2024.

Despite recent acceleration in the penetration of low-carbon technologies, particularly in China, limited grid capacity, geopolitical tensions and affordability concerns will remain barriers to large-scale deployment, the report said.

In its previous year's outlook, TotalEnergies told investors that "the USA will set the pace of the world's energy transition" as nations strive to reach ambitious climate targets by 2050.

However, after a sweeping policy pivot under President Donald Trump that has seen the country shift in favor of new fossil fuel investments, other geographies have taken on new importance in driving the energy transition forward.

"The European Union is leading the way in reducing emissions by continuing to decarbonize its electricity mix," the report said, without making reference to the US policy shift.

Decarbonization debate

The company's baseline "trends" assumption assumes that Europe moves ahead with major climate policies, including a 2035 ban on internal combustion vehicles, but warned that regulations and mandates "often trigger political backlash" and hinted at future challenges.

Among the key issues facing Europe, the report stated that countries are contending with "massive investment needs" in their electricity grids, challenges in preserving the competitiveness of their industry, and widespread reluctance to accept the costs associated with decarbonizing energy use.

On a global scale, TotalEnergies sees fossil fuels still accounting for 60% of primary energy demand in 2050, down from a current 80% share. As a result, it sees policymakers missing climate targets to keep temperature increases below 2 degrees Celsius by the year 2100, forecasting a 2.6 – 2.8 degree increase by the same date

To stay below the 2-degree threshold, India and the Global South will need to increase its installations of solar and wind capacity by 80% before 2030, the report said.

The shifting outlook follows an industry-wide pivot among the energy majors to back new investment in conventional oil and gas projects and scale back low-carbon projects.

The company recently confirmed plans to achieve 3% growth in its oil and gas output until 2030, after reversing course from five years of decline through 2025. It has been the leading exporter of US LNG since 2021 and has credited higher output for sustaining its income through a weaker oil price environment.